This study examines how the declining birthrate and policy changes have influenced childcare demand and supply systems and suggests specific measures for improvement. The results showed that there is an oversupply of childcare services nationwide rather than a shortage, and that there is no systematic supply-and-demand management system based on local demand. Both parental benefits and parental leave were found to have a major impact on reducing the use of institutional care. To address the supply-demand imbalance caused by the declining birthrate and institutional changes, identifying local demand and establishing a responsive supply system are essential.