The Relationship Between Developmental States and Ultra-Low Fertility

One factor implicated in ultra-low fertility in the “Asian Miracle” economies of South Korea and Singapore is the competitive educational system. Having fewer children allows families to invest more time and money in their children to maximize the chances of higher educational admission, viewed as a predictor of good financial prospects (Anderson & Kohler, 2013; Choe & Retherford, 2009). However, existing research does not indicate how the competitive educational system came about. This research suggests that the developmental state, a key driver of Asian economic development may be implicated.

Apart from rapid economic development, the “Asian Miracle” was coined for challenging the-then prevailing view that the ‘prerequisites’ of capital and technology were required before industrialization occurred (Rostow, 1960). These ‘prerequisites’ arose during the industrialization process (Gerschenkron, 1962, 1968) which were attributed institutional factors, specifically the state.

Shin (2005) outlines what he terms as the Gerschenkronian ‘substituting’ (South Korea) and ‘complementing’ (Singapore) models. The ‘substituting’ model challenges Western advanced economies in technologically dynamic industries, with the state directing loans to conglomerates (chaebols) and guaranteeing foreign loans for technology purchases. In contrast, the ‘complementing’ model incentivizes multinational corporations to relocate by providing low-cost labor and tax benefits.

Skilled labor would be necessary in the ‘substituting’ model to compete in the technologically dynamic industries, therefore forming the roots of competitive educational systems in modern Korea. In the ‘complementing’ model, emphasizing low-cost labor meant that education was less crucial during early industrialization. However, technological advancements and rising labor costs in the 1980s necessitated Singapore’s shift to a ‘knowledge-based economy’ and a competitive educational system.

To conclude, we suggest that the developmental state could provide useful insights into the factors implicated in ultra-low fertility, such as the competitive educational system and gender inequality. However, we do not reject competing explanations, such as existing cultural differences.

References

Anderson, T., & Kohler, H-P. (2013). Education fever and the East Asian fertility puzzle: A case of low fertility in South Korea. Asian Population Studies, 9(2), 196-215. https://doi.org/10.1080/17441730.2013.797293.

Choe, M. K., & Retherford, R. D. (2009). The contribution of education to South Korea’s fertility decline to “lowest-low” level. Asian Population Studies, 5(3), 267-288. https://doi.org/10.1080/17441730903351503

Gerschenkron, A. (1962), Economic backwardness in historical perspective. In A. Gerschenkron (Ed.), Economic Backwardness in Historical Perspective (pp. 5-30), Harvard University Press.

Gerschenkron, A. (1968). Continuity in history, and other essays. Harvard University Press.

Rostow, W. W. (1960). The five stages of growth: A summary. In. W. W. Rostow (Ed.), The stages of economic growth: A Non-Communist Manifesto (pp. 4-16). Cambridge University Press. https://doi.org/10.1017/CBO9780511625824

Shin, J-S. (2005). Substituting and complementing models of economic development in East Asia. Global Economic Review, 34(1), 99-118. https://doi.org/10.1080/1226508042000329006