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Korea Exchange’s Fertility Incentives Creating Controversy

Korea Exchange’s Fertility Incentives Creating Controversy

Posted May. 03, 2005 22:50,   


The Korea Exchange (KE)’s recent decision aimed at encouraging childbearing among its staff is causing controversy. The KE decided to grant five million won in cash and full college scholarships for the children of employees who give birth to three or more.

It announced on May 3 that those employees who give birth to three or more children would be granted five million won per child, starting from the third child, and full financial support for the college admission and tuition fees of all of the employee’s children, including the first and second ones.

Therefore, an employee who gives birth to three or more children can receive up to almost 100 million won, depending on the children’s major in college, including the initial five million won grant and the long-term amount paid for college expenses.

The KE currently grants loans to its employees for part of their child’s college admission and tuition fees.

In addition, it decided to remodel part of its office building in Seoul into a childcare center that can accommodate some 50 children of its employees and open it this September. It is also planning to build a childcare center in its headquarter in Busan after conducting a survey on demand.

Also, the KE will pay part of the testing costs for pregnant employees, including special scans that are not covered by health insurance.

Some see the unprecedented fertility incentives as a “moral hazard.”

The KE is an organization operated on transaction fees that securities firms, its shareholders, pay.

An official at a securities firm raised a complaint, saying, “It is desirable to promote and support childbearing, but the KE’s plan is too much. It shouldn’t squander shareholders’ money.”

Kwang-Hyun Kim kkh@donga.com