Author: Won Sung(Bank of Korea), Inkyung Yoo(Bank of Korea), Jongwoo Chung(Bank of Korea)

We analyze the determinants of the total fertility rate changes in 35 OECD countries over the past 20 years(2002-2021). Based on this, we further discuss key implications for the ultra-low fertility rate phenomenon in Korea. The results show that economic factors, social/cultural factors, and policy/institutional factors significantly affect the change in the total fertility rate. Policy initiatives like expanding family-related public spending, promoting parental leave utilization, and enhancing youth employment opportunities are closely related to the rise in the total fertility rate. Meanwhile, addressing structural challenges such as decentralization, embracing diverse family structures, and promoting gender equality is anticipated to affect the total fertility rate's recovery positively. Using the baseline results, we find that the increase in female employment rate and urban population concentration most significantly decreased the total fertility rate in Korea over the past 10 years(2012-2021).