Seoul, South Korea (LifeNews.com) -- Because of legalized abortion and the revocation of maternity benefits to women who have a third child South Korea is facing a severe underpopulation problem and will soon spend $20 billion to combat it.

Fearing overpopulation problems similar to China's and not wanting to dampen economic prosperity, South Korea 40 years ago began encouraging couples to limit their number of children to two.

The nation legalized abortion in 1973 and, in 1984, ended maternity benefits for women having a third child.

Now, South Korea has the lowest birth rate of any of the OECD members and is having problems sustaining its economic growth. It also faces the prospect of an aging population and not having enough younger Koreans in the workforce to support them.

National Statistical Office figures show the number of births dropped to 476,000 last year from 1 million in 1970. The nation has the world's fastest aging population, the office said.

The Korea Economic Institute in Washington says the current problems are the result of the population policies South Korea put into effect long ago.

The $20 billion will go towards paying for kindergarten costs for all children and additional financial help for families with three or more children, according to a Bloomberg report.

Some $6 billion will be used to pay for more day care centers while $680 million will go towards helping infertile couples conceive.

Bloomberg reports the country wants to increase the number of births to 1.6 per woman by 2010. The country is also considering changes to the nation's tax structure to make it more affordable to have a larger family and to help businesses help large families.