Latest / The Demographics Podcast with Fexingo: Aging Populations, Birth Rates, and Economic Impact / How Falling Birth Rates Reshape the Education Industry
Transcript
- Lucas: South Korea's fertility rate has been the lowest in the world for years now — as of this summer, it's still below 0.8 children per woman. That demographic reality is now remaking the entire education industry there, from elementary schools to the country's most prestigious universities. Luna: I've seen headlines about school closures, but I hadn't connected it to the birth rate directly. What's the scale of the impact so far? Lucas: It's huge. In 2025, primary school enrollment in South Korea fell below 2.5 million for the first time — that's down from about 3.2 million a decade ago. Entire neighborhoods in Seoul have consolidated elementary schools, combining two or three schools into one. Luna: So they're literally shutting down schools because there aren't enough kids. What happens to all the teachers? Lucas: That's the flip side. South Korea used to have hyper-competitive teacher exams — thousands of applicants for a single position. Now we're seeing a teacher surplus. In some provinces, new teachers are waiting years for permanent placements. Some are retraining for adult education or moving to private tutoring. Luna: Private tutoring is still booming, though, right? I mean, the cram school industry — hagwons — they're still huge. Lucas: Right, but even that market is shifting. Hagwons are competing for fewer students, so they're diversifying into test prep for university entrance and professional certification. The days of just drilling math for middle schoolers are fading. Luna: And universities? That must be a nightmare. Lucas: It is. The number of college entrance exam takers has dropped by about 30 percent over the last decade. The top universities like Seoul National still get plenty of applicants, but provincial and private universities are facing serious vacancies. Some have already merged or been acquired. Luna: I remember reading that a few years ago the government was trying to cap enrollment, but now they're probably scrambling to keep seats filled. Lucas: Exactly. The strategy now is to recruit international students aggressively. South Korea has set a target to host 300,000 international students by 2027. That's a big increase from around 180,000 a few years ago. They're basically using foreign students to prop up domestic enrollment numbers. Luna: Is this only happening in South Korea? I feel like Japan and China have similar issues. Lucas: They absolutely do. Japan's university enrollment has been declining since the early 2000s. China's college-age population peaked around 2020 and is now shrinking. But South Korea is the most extreme case — it's like a laboratory for the rest of the world. Their birth rate is lower than Japan or China. Luna: So what does that imply for the business model of education? It sounds like the old model of 'build more schools, hire more teachers, fill classrooms' is dead. Lucas: Right. The industry is shifting from a volume-based model to a value-based one. You can't just rely on a steady stream of 18-year-olds. You have to attract adults for lifelong learning, corporate training, upskilling. That's actually the growth area. Luna: Adult education — it's not just about hobby classes anymore. Companies need workers to reskill as industries change. Lucas: Exactly. In South Korea, the government has been pushing 'lifelong learning accounts' — citizens get vouchers to spend on approved courses. Universities are pivoting to offer certifications for working professionals. That's a much more stable revenue stream than hoping enrollment holds up. Luna: It's almost like the education industry is being forced to grow up and become more like a services business. Lucas: That's a good way to put it. And honestly, if this episode has helped you see how demographic trends are reshaping an entire industry, Luna: Yeah, I think it's one of those things that clicks once you connect the dots. Lucas: If it made a difference for you, you can support the show at buy me a coffee dot com slash fexingo. It's how we keep the podcast ad-free and focused on stories like this. Luna: We really appreciate it. It helps us dedicate time to researching these angles. Lucas: So back to the broader picture — what's happening in South Korea is a preview. The education industry everywhere is going to face similar pressures. The question isn't whether your country's schools will see declining enrollment; it's when and how fast. Luna: And in the meantime, the schools that adapt fastest — by targeting adults, embracing technology, and becoming more flexible — will survive. Lucas: Right. And that adaptation isn't just about keeping the lights on. It's about redefining what education even means in a society where there are more people over 65 than under 15. Luna: That's a sobering thought, but also a huge opportunity for the right innovators. Lucas: Agreed. So when you look at South Korea's education system today, you're basically looking at a crystal ball for the rest of the developed world. The next decade will tell us who read the signals correctly.