Countries in Asia are spending millions to reverse falling fertility rates. But throwing money at the issue isn’t working

Countries in Asia are spending millions to reverse falling fertility rates. But throwing money at the issue isn’t working
  • PublishedMay 4, 2024

The country with the lowest fertility rate in the world is considering paying parents 100 million won ($112,000) in cash for each baby born.

South Korea’s civil rights commission conducted a survey last month, aiming to gauge the opinion of citizens before implementing the program. 

The commission is proposing to spend 23 trillion won ($26 million) annually on the program, which is about half of the national budget allocated to initiatives addressing low birth rates.

“Through this survey, we plan to re-evaluate the country’s birth promotion policies to determine whether direct financial subsidies could be an effective solution,” the commission said.

“Low birth rates are no longer an issue exclusive to certain individuals. It is a matter that both the government and the private sector should work together to resolve.” 

The fertility rate is a metric used to express the average number of children a woman can be expected to have during her reproductive lifetime.

South Korea offers public housing 

Ahead of South Korea’s legislative elections in April, the country’s major political parties vowed more public housing and low interest loans in efforts to make life easier for young families.

It’s hoped these kinds of measures will help stem population decline.

Seoul, where the 0.55 fertility rate is the lowest in the country, has been at the forefront of these promises. 

A parents pushes a stroller with a baby in a park
Similar situations are unfolding across Asia, with governments offering incentives for more people to have children.(Reuters: Aly Song)

Last Sunday, the city’s government announced it would provide subsidies to couples who don’t own houses and who have newborns from 2025, the Korea Herald reported. 

For those who qualify, the program plans to provide 300,000 won ($334) per newborn per month for a maximum of two years. 

Amid rising costs of living, gender inequality and harsh workplace cultures, a similar story of falling fertility rates is unfolding across many parts of Asia.

So countries are spending big in schemes to try and persuade people to have more children.

China paying for IVF treatment and childcare

Much of China’s demographic downturn is the result of its one-child policy from 1980 to 2015.

Since 2021, couples have been allowed to have up to three children – but this hasn’t been effective. 

Provinces and even companies are offering everything from cash subsidies to assistance with child care and paying for fertility treatments like IVF.

A mother walks with her twin daughters on a street
Beginning in 2016, the Chinese government allowed families to have two children, and in 2021 all married couples were permitted to have as many as three.(Reuters: Aly Song)

In the city of Hangzhou, the government gave parents with two children a one-off subsidy worth around $4,300 for having a third child in 2023, according to the local Zhejiang Daily.

In June 2023, Beijing’s government announced it would cover 16 types of assisted reproduction technology.

In-vitro fertilisation (IVF), embryo transplantation, freezing and storing semen are some of the treatments included under basic insurance.

Around a similar time, one of the world’s largest online travel agencies, China’s, introduced childcare subsidies worth 1 billion yuan ($210 million) to encourage its employees to have kids.

Workers who have been with the company for at least three years will receive an annual bonus of 10,000 yuan ($2,150) for five years for every child born.

“Through the introduction of this new childcare benefit, we aim to provide financial support that will encourage our employees to start or grow their families without compromising on their professional goals and achievements,” executive chairman James Liang said.

Japan proposes student loans and more childcare 

The next few years are possibly “a last chance” for Japan to reverse its declining fertility rate, Children’s Policies Minister Masanobu Ogura said last year. 

If the recent trend continues, the young population will shrink at twice the current pace by the 2030s, he said.

To address the issue, Mr Ogura proposed a plan that included more government subsidies for child rearing, greater access to childcare services and efforts to shift cultural mindsets around gender equality.

A mother carrying a baby while standing underneath cherry blossom trees in full bloom
The number of babies born in Japan fell for an eighth straight year to a record low in 2023.(Reuters: Issei Kato)

“While diverse views about marriage, childbirth and child-rearing should be respected, we want to make a society where young generations can marry, have and raise children as they wish,” he said.

The proposal was submitted to Prime Minister Fumio Kishida for further consideration. 

Currently, Japan offers a lump sum grant of ¥500,000 ($4,900) to new parents for each child.

There’s also a child-rearing allowance that gives families with newborns ¥15,000 ($146) a month until their child reaches the age of three.

From four to 15, a monthly allowance of ¥10,000 ($98) is provided. 

Taiwan provides subsidised kindergarten and leave

Taiwan and Singapore’s fertility rates remain among the lowest in the world.

During the pandemic, Taiwan’s government extended subsidies for IVF treatment to all couples, regardless of their income.

Existing incentives include subsidised kindergarten, childcare payments and six months of paid parental leave.

A woman wearing a purple mask looks at her phone as she leans on a stroller with her baby inside.
Taiwan’s fertility rate is particularly stark among East Asia’s low birth rate.(ABC News: Mitch Woolnough)

Ahead of Taiwan’s election in January, now-President William Lai said the declining birthrate should be a top priority, while opposition candidate Hou Yu-ih proposed more subsidies for families with three children and egg-freezing.

Singapore offers savings accounts for children

As for Singapore, the government boosted its baby bonus scheme, giving out as much as S$10,000 ($11,200) in cash for first and second children.

It increases to S$13,000 ($14,600) for your third and subsequent children.

“This helps to lighten the financial outlay when it comes to raising your child,” Singapore’s government says. 

Alongside the cash, the scheme offers a special savings account for children and comes with an initial deposit of S$5,000 ($5,600).

Four weeks of paternity leave for working fathers, 12 days of unpaid leave for each parent and opening an additional 22,000 preschool centres from 2022-2024 are also in the mix in Singapore.

Has any of this been effective?

Many of these policies have been in place across Asia for years, but fertility rates continue to decline.

Workaholic cultures, high costs of living, difficulties in accessing child care and gender inequality are all reasons.

That’s according to Australian National University’s Peter McDonald, who is an emeritus professor of demography.

“Employers in East Asia make very little effort to accommodate the combination of work and family,” he told the ABC.

“They have long working hours and demands that the worker’s first priority must always be the firm, not the family.”

People sitting inside a carriage of a train
Experts say the number of work-related suicides in Japan in 2015 was as high as 20,000.(Supplied: Unsplash)

Professor McDonald said many government policies were “not sufficiently generous to change people’s behaviour”.

“That is, not sufficient to offset the direct and indirect costs of the child,” he said.

His points about being forced to choose work over family are echoed by Xiujian Peng, a population expert at Victoria University.

“Work-life balance does not exist in many Asian countries,” Dr Peng told the ABC. 

Dr Peng says brutal work cultures like “996” in China, “Kwarosa” in South Korea and “Karoshi” in Japan are the root cause for people not wanting to start a family. 

“How can people work these kinds of long hours be expected to have the time and energy to look after a child?”

Gender inequality another factor

Entrenched sexism and gender discrimination have long been hot topics in East Asia.

A 2022 survey revealed 30 per cent of Korean office workers had experienced some form of workplace harassment in the past year, with women and part-time workers more likely to be the victims.

It’s “very common” for employers to discriminate against female employees who even think about having a baby, Professor McDonald said. 

“Women in East Asia are well aware that their career progress will be immediately halted if they have a baby.”

A group of women wearing black office clothing and heels walking in the city
Work demands make parenting difficult for many people across Asia.(Reuters: Kim Kyung-Hoon )

Professor McDonald said governments were well aware of the issues.

“But it seems the employers are too powerful and are able to resist radical change,” he said. 

“From the employers’ perspective, they see themselves in competition with other firms, and with other countries, and keeping labour costs low is a central strategy for maintaining their competitiveness.”

Money not enough to fix deep-rooted issues

Dr Peng said throwing money at people was not enough to convince them to have children.

“The financial incentives are important but not effective on its own. You need to combine economic factors with all the others — social, cultural and political.”

“Governments first need to address the lack of work-life balance. There needs to be a greater push for flexible working environments,” she said.

Dr Peng said it should start with the bare minimum: employees not being expected to stay back and work beyond their hours, or to answer calls and emails after they finish.

A woman wearing a blazer walks among a crowd of people.
Inequality and discrimination in workplaces in Asia deters some women from wanting children.(ABC News: James Oaten)

As countries around the region employ various strategies to get people to have kids, Professor McDonald has a blunt reminder of what’s at stake.

“Schools start to run out of pupils, the number of new entrants to the labour force falls off sharply affecting national product and the population ages rapidly putting strain on the capacity to support the increasing aged population,” he said. 

“The severity and speed of these consequences depends on how fast and how far the fertility rate falls.”


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