South Korea Has the OECD’s Highest Capital-Region Population Concentration—Why Does Seoul Keep Pulling People In?

 South Korea is moving in the opposite direction from many advanced economies.

In several OECD countries, high housing costs and the rise of remote work have encouraged people to leave capital cities and relocate to regional or mid-sized urban areas.

South Korea, however, continues to experience a powerful concentration of population, jobs and opportunity in Seoul and the surrounding capital region.

According to an analysis by Japan’s Nikkei based on the United Nations’ World Urbanization Prospects 2025, 43.3 percent of South Korea’s population lived in the capital region in 2023—the highest share among the 37 OECD countries included in the analysis.

The figure was reportedly up from 42.1 percent in 2010, indicating that South Korea’s concentration problem has continued to deepen.

The United Nations’ 2025 revision provides country profiles, data tables, maps and technical information on global urbanization and city-population trends.

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Other advanced economies are becoming less concentrated

The pattern in South Korea contrasts with developments in many other OECD countries.

In a number of advanced economies, residents have moved away from expensive capital cities and large metropolitan areas.

Housing affordability is one major reason.

Real house prices have risen by more than 40 percent on average across the OECD over the past decade, according to the organization’s housing data.

As housing costs increase, families and younger workers may choose smaller cities where homes are cheaper and more spacious.

Remote and hybrid work have also reduced the need for some employees to live near central business districts.

When workers do not have to commute every day, a regional city can offer a lower cost of living without requiring them to give up their jobs.

Why South Korea remains different

South Korea also has extremely high housing costs in Seoul.

Yet people continue to move toward the capital region because the country’s most valuable opportunities remain concentrated there.

Jobs

Many of South Korea’s largest corporations, financial institutions, technology companies and professional-service firms are headquartered in or near Seoul.

The capital region offers not only more job openings but also better opportunities to change employers and advance a career.

A young worker who leaves Seoul may face a much narrower range of companies and occupations.

Education

Many of the country’s most prestigious universities and private education services are located in the capital region.

Students often move to Seoul for university and remain there after graduation to begin their careers.

This creates a long-term pipeline that transfers younger people from regional areas to the capital.

Health care and culture

Major hospitals, specialist physicians, entertainment venues, cultural institutions and private services are also heavily concentrated in Seoul.

Moving to a regional area can therefore mean giving up not only career opportunities but also access to health care, education and cultural life.

Networks and decision-making power

Although South Korea has relocated government agencies to Sejong and public institutions to regional innovation cities, many corporate and political networks remain centered on Seoul.

Companies often prefer the capital region because it provides easier access to investors, clients, skilled employees and government decision-makers.

The capital region is not necessarily the winner

Population concentration creates advantages.

When companies and skilled workers are located close together, information travels more quickly and business activity can become more productive.

But excessive concentration also produces serious costs.

Seoul faces high housing prices, long commutes, traffic congestion and intense competition for education.

Young people move to the capital for opportunity but may delay marriage and childbirth because housing and living costs are so high.

Regional areas, meanwhile, lose younger residents.

When the population falls, schools close, bus routes disappear and hospitals and local businesses struggle to survive.

South Korea’s Ministry of the Interior and Safety currently designates 89 local jurisdictions as population-decline areas, illustrating how widely the demographic crisis has spread beyond Seoul.

Why financial incentives alone will not solve the problem

The South Korean government has promoted public-institution relocation, regional investment zones and incentives for companies that move outside the capital region.

These policies can help, but they may not be sufficient.

A temporary subsidy cannot persuade a family to remain in a region that lacks stable jobs, good schools, medical services and reliable transportation.

A government building alone cannot create a self-sustaining regional economy.

Jobs, universities, housing, health care, cultural services and business networks must develop together.

Regional development needs a new strategy

South Korea does not need to turn every regional city into a smaller version of Seoul.

Instead, each region needs industries that reflect its existing strengths.

Manufacturing regions can combine traditional industry with robotics, artificial intelligence and clean technology.

Agricultural regions can move beyond primary production by developing food processing, tourism, e-commerce and exports.

Regional universities can become centers for workforce training, research and local entrepreneurship.

Remote work can also become a tool for decentralization, but only when regional areas have strong digital infrastructure and attractive living conditions.

A national survival strategy

Balanced regional development is often described as assistance for struggling local areas.

In reality, it is a national survival strategy.

Reducing excessive concentration would ease housing and congestion pressures in Seoul while creating new economic opportunities elsewhere.

South Korea cannot simply ask young people to move to the regions.

It must make regional life a rational and attractive choice.

The real goal should be a country where people do not have to move to Seoul to build a career, receive quality health care or give their children a good education.

Until that becomes possible, South Korea’s capital-region concentration is likely to continue—even as the country’s overall population declines.