Boosting the fertility rate in China requires a more comprehensive package of pro-family measures
The number of newborn babies in China has swung widely over the past decade－with slow growth in the first few years followed by a rapid decline. After China’s family-planning policy was relaxed in 2016, the number of new births rose briefly to 17.86 million in 2017－compared with 15.88 million in 2010－but it has fallen every year since. Chinese mothers gave birth to a nearly five-decade low of 14.65 million babies in 2019, reinforcing worries about the cost of a lower birthrate on the economy and the country’s ability to support its rapidly aging population in the years to come.
Is there anything China can do to buck the trend?
It has been demonstrated by developed countries that no single policy will do the trick of reversing an undesirable fertility decline. Boosting fertility rates requires a more comprehensive package of pro-family measures that covers marriage, fertility, education, housing, elderly care and social insurance and so on to optimize the supply and allocation of public resources, so as to comprehensively support the development of families and increase the desire of young people to have children. Therefore, China should revise its outdated policies and provisions.
The country should focus on the key economic factors that affect young people’s fertility intentions and mitigate a family’s financial burden in raising children by lowering the costs of child birth, childbearing and education.
Nowadays, raising a kid costs huge amounts of money, especially in cities where the cost of living constantly increases.
The Chinese government has unveiled a string of policies to encourage people to have more children in the major social and economic development targets for the 14th Five-Year Plan period (2021-25). The policies include not only further improving prenatal and postnatal care as well as maternity and childcare, but also helping parents with the costs of childbearing, childrearing and education by establishing a more inclusive kindergarten system and childcare services and a more balanced education system.
The most direct way to encourage people to have more children is to give out child allowances. But generous subsidies would put the country’s public finance under huge pressure, and are not in accordance with China’s current national situation.
A more feasible solution for China would be indirect subsidies in the form of tax breaks for parents. China’s new personal individual income tax law, which came into effect on Jan 1,2019, included children’s education into the expenditures that could be deducted every month from the parents’ taxable income. However, the amount is relatively small and the cost of raising a child aged between 0 to 3 years old has not been included. Furthermore, the law shows no regional disparity. These problems require further improvements to the law.
Another feasible option would be a direct education expense deduction, which would not only help enhance people’s education level, but also mitigate the financial burden of raising children. China provides nine-year compulsory education for free, from primary school to junior high school. Some deputies to the National People’s Congress, the country’s top legislature, have already proposed that free compulsory education be extended to include preschool education and relevant policy changes are already being discussed. Given the great discrepancies in development level among different regions, economically developed regions should take the lead in using public finance to extend the nine-year free compulsory education to cover preschool and senior high school education.
A comprehensive set of pro-family policies should be enacted to help parents balance childcare duties and career development.
More and more Chinese women have access to college education and post-graduate education and the enhancement of education level increases women’s career expectations, pushing them to delay marriage and pregnancy as education and career development take up time that they could have used for marriage and childbirth. Chinese women give birth to their first child at an increasingly later age.
Therefore, policies that help women better balance their families, careers and personal development are of great significance in increasing their fertility intentions. Such policies include those aimed at ensuring participation in the work force, extending women’s parental leave, helping women get back into the workforce after childbirth and sponsoring childcare services with public finance. A number of regions in China have extended maternity leave for women. For instance, some parts of Guangdong, Heilongjiang and Hainan provinces have extended maternity leave to six months.
That said, if the maternity leave is too long it could exacerbate discrimination against women in the job market. Therefore, relevant policies should take into account the extra cost of hiring a female employee. In the meantime, government-sponsored options for childcare services－including day care and after-school care services－are another effective way of helping people balance childcare duties and career development. Relevant policies should encourage and guide the development of short-term day care services and provide subsidies to after-school care services.
It is also critical to create a fertility-friendly, children-friendly and family-friendly social and cultural environment for people willing to have babies.
Some young Chinese nowadays may choose to avoid the responsibility of having children. Therefore, China should increase people’s desire for strong and positive family relationships to raise their fertility intentions. China could look to the Singapore model and give priority to families with children in the application for affordable housing, public rental housing and housing loans. This will not only reduce the negative impact of high housing prices on fertility intentions, but also tacitly coveys the message of government support for fertility.
The author is an associate researcher of the Institute of Population and Labor Economics at the Chinese Academy of Social Sciences. The author contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.