While most studies on low fertility have focused on various constraints increasingly putting more pressure on individual households, including childrearing costs, this study highlights urbanization as a major driver of rising childrearing expenses. The concentration of population in large cities can trigger broader structural changes beyond merely increasing childrearing expenses at the household level. Specifically, large-scale urbanization, by increasing housing costs and commuting duration, can affect housing and marriage markets, thereby influencing young people’s decisions on housing, marriage, and childbirth. This study explores these mechanisms to shed light on the causes of South Korea’s extremely low fertility and inform policy responses.

A panel data analysis on total fertility rates (TFR) and urban population shares across countries confirms a negative correlation between urbanization and fertility, regardless of development level or institutional structure like federalism. This relationship is also not associated with extramarital births, as no pronounced effects are observed in East Asian Confucian societies. These findings support the view that large-scale urbanization is one of the root causes of low fertility. For decades, nearly all countries have expanded existing cities into metropolises and megacities, concentrating jobs vertically and spreading residential areas horizontally. The resulting congestion has increased commuting distances and times, likely contributing to declines in marriage and fertility rates.

Korea’s urban structure undermines intergenerational and intragenerational equity through fluctuations in housing asset values. Human capital across and within generations is prone to inefficient allocation, while long commutes constrain productivity potential. Thus, urban restructuring is necessary to create an environment where workers can operate at peak efficiency, leading to higher national income. Without such reform, overcoming low fertility remains elusive, as reproductive-age populations may forgo marriage or childbirth under current urban conditions.

Advanced economies have promoted family-friendly policies such as maternity and parental leave, childcare support, and early childhood education to boost fertility. However, when urbanization and per capita income―factors not accounted for in the original analysis―are controlled for using data from Olivetti and Petrongolo (2017), the effects of these policies either disappear or run counter to expectations. While these policies may be effective in government agencies, public enterprises, and large corporations, they are less so in small and medium-sized enterprises (SMEs), which account for most employment. Because SMEs tend to hire easily replaceable labor, employees requesting parental leave may face dismissal, and employers may avoid hiring unmarried women or childless married women. These dynamics are not easy to address through policy redesign alone. Moreover, as family-friendly policies target married couples, they favor wealthier ones whose marriage prospects are more strongly tied to inherited assets like housing, which raises concerns about inequity.

As effective family-friendly policies depend on a supportive environment for families to form, addressing the barriers created by large-scale urbanization should be a top policy priority. Foremost, the factors driving people into large cities must be dispersed to other regions, notably higher education and employment for reproductive-age populations. Accordingly, universities and businesses should be relocated away from large cities. Additionally, urban development and structural innovations should decentralize job clusters currently vertically concentrated in city centers to facilitate household formation through marriage and childbirth.

Theoretically, urban expansion, marriage, and fertility are interconnected as follows. As population inflows driven by employment and higher education accumulate and the children of existing urban residents enter the workforce, city centers become overcrowded and housing prices rise, prompting the development of suburban new towns. When female labor force participation is low, unmarried women generally lack the economic independence to choose singlehood, so marriage rates have little impact on urban expansion. However, following suburban development, as women’s labor force participation and incomes increase, more high-income unmarried women prefer singlehood due to commuting burdens and concerns over career interruptions associated with marriage, which lead to lower marriage rates and, in turn, lower fertility. These trends were observed in the Seoul Metropolitan Area (SMA) during the development of Seoul’s Gangnam area and the first and second phases of new town development.

To verify the relationship between urban expansion and declining marriage and fertility rates, this study empirically analyzes commuting volume data by travel time across the SMA, encompassing Seoul, Gyeonggi, and Incheon, from 2017 to 2022. The results show that higher volumes of short-distance commuting (one-way commutes of 60 minutes or less) are linked to higher fertility rates. In contrast, higher volumes of long-distance commuting (over 60 minutes) are linked to lower fertility rates. Marriage rates exhibit the opposite pattern: higher volumes of short-distance commuting are linked to lower marriage rates while higher volumes of long-distance commuting to higher marriage rates. Although it was hypothesized that the share of one-person households would increase with higher short-distance commuting volumes and decrease with higher long-distance commuting volumes, regression results showed a different pattern.

Findings suggest that many young adults, especially unmarried women, move closer to their workplaces but delay or forgo marriage due to high housing costs. When they choose to marry, they are compelled to relocate to areas with longer commutes to reduce housing expenses. Taken together, even as the short-distance commuting population increases in the SMA, only a few individuals who can afford high housing costs can marry and have children. Most others postpone marriage or move to more distant areas, where time constraints reduce the likelihood of childbirth.

Analysis of the impact of commuting duration on fertility rates in Seoul shows that economic activity, as proxied by changes in commuting volumes, has little effect on fertility, suggesting that the entire city functions as a business district. In contrast, in Gyeonggi and Incheon, fertility rates rise when the long-distance commuting population decreases or the short-distance commuting population increases. As for marriage rates, an increase in short-distance commuting volume within Seoul’s districts correlates with lower marriage rates and a rise in the share of one-person households. This suggests that high-income, professional unmarried women who choose to live in Seoul to be near their workplaces may delay or forgo marriage due to concerns about long commutes or career interruptions associated with marriage. Overall, in Seoul, more short-distance commuters correspond with a higher share of one-person households and lower marriage rates, without a meaningful correlation with fertility rates. In contrast, in Gyeonggi and Incheon, more short-distance commuters are linked to higher fertility rates, while an increase in long-distance commuting corresponds to a higher share of one-person households and lower fertility rates.

Based on these findings and the broader Korean context, this study proposes relocating universities and businesses outside the SMA, rather than expanding remote work, housing supply, or immigration. Relocating universities could lead to new university hospitals in non-capital regions, helping to reduce regional disparities in healthcare access. Also, the prospect of obtaining permission to establish medical schools can incentivize universities to relocate and help address the shortage of healthcare professionals. Furthermore, relocated universities would face direct competition with local universities, necessitating a stronger focus on industry-academic collaboration to enhance student employment and secure research funding. Government funding traditionally allocated to universities for various purposes could be redirected toward national scholarships and research and development grants.

Lastly, to build self-sustaining cities, the relocation of businesses must accompany university relocation. A sufficient number of businesses should move outside the SMA to absorb the local labor supply and foster confidence that individuals educated in non-capital regions can find employment, secure housing, get married, raise children, and lead stable lives, all within the same area. In this regard, businesses should relocate not only production and warehouse facilities but also their headquarters. While inheritance or corporate tax reductions could be considered as incentives for business relocation, industrial policy strategies should also be taken into account to ensure sustained economic growth.

Preface
Abstract
Summary (KOR)

Chapter 1. Introduction

Chapter 2. Literature Review
　Section 1. Urbanization, Agglomeration Effects, and Economic Development
　Section 2. Urbanization and Declining Fertility
　Section 3. Intra-Metropolitan Mobility, Marriage, and Fertility
　Section 4. Low Fertility in Korea

Chapter 3. Methodology

Chapter 4. Theoretical Framework and Hypotheses
Section 1. Urbanization, Marriage, and Fertility
Section 2. Application and Limitations of Theoretical Implications
Section 3. Megaurbanization, Singlehood, and Marriage
Section 4. Hypothesis Development

Chapter 5. Urbanization and Fertility Rates
　Section 1. Relationship Between Urbanization and Fertility
　Section 2. Data, Variables, and Descriptive Statistics
　Section 3. Results

Chapter 6. Urbanization and Work-Family Reconciliation Policies
　Section 1. Work-Family Reconciliation Policies
　Section 2. Data, Variables, and Descriptive Statistics
　Section 3. Results from Olivetti and Petrongolo (2017)
　Section 4. Results Controlling for Urbanization

Chapter 7. Commuting Time, Singlehood, Marriage, and Fertility
　Section 1. Implications of Commuting Time
　Section 2. Data, Variables, and Descriptive Statistics
　Section 3. Results
　Section 4. Fertility Rate Analysis Results
　Section 5. Marriage Rate Analysis Results
　Section 6. Single-Person Household Analysis Results

Chapter 8. Conclusion and Policy Implications
　Section 1. Summary and Implications of Findings
　Section 2. Policy Implications

References
Appendices