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China Wants More Babies, So Do Other Countries

June 1, 2021
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Joseph F. Coughlin Joseph F. Coughlin

First there was one, then there were two, and now, there are three. That sums up the evolution of China’s child policy since 1979. According to Xinhuanet, China’s government has shifted its national baby policy — now allowing three children per family to promote a “birth-friendly society.”

Fearing the far reaching socioeconomic impacts of overpopulation in 1979, China instituted the one-child one family policy. The policy kicked off a demographic butterfly effect not anticipated by policymakers and planners. Here are just a few:

In 2015 Beijing policymakers sought to tweak the population structure to address a rapidly developing scenario of a nation becoming old before it became rich. Policymakers announced an easing of the one-child one-family policy giving the green light to families to have two children per family. The policy shift did not produce the intended result. Rather than an uptick in births, there was a precipitous drop in China’s birth rate to 1.3 births per female, well below the 2.1 children per female necessary to maintain the population.

China’s policymakers were likely prompted to take the current action raising the number of children per family to three when recent census results indicated that only 12 million babies were born in 2020 compared to 18 million born in 2016. Even discounting possible 2020 pandemic effects, the birth rate since 2016 has been in steady decline through 2019.

In 1979 Beijing feared overpopulation, now it appears that China’s policymakers are facing the challenging prospect faced by many nations — too few children and an unprecedented number of older people. In fact, China’s recent census shows that the percentage of the population over 65 years old has risen from 8.9% to 13.5% in a single decade.

Beijing’s policy change is about more than the number of children per family. China’s government is also announcing the implementation of more “supportive measures” to encourage couples to have more children. China’s policymakers appear to be in alignment with other governments around the world that assume young people are not having children because of the financial cost of raising a child.

Cost is apparently the ultimate contraceptive. The assumption is that the lack of affordable prenatal care, inadequate or absent family-friendly work policies, poor access to affordable childcare and related healthcare explain the drop in birth rates in China and many other nations worldwide. Perhaps, but even nations with more “birth-friendly” policies have met with dubious results.

Scandinavian countries are often heralded as providing ideal child-friendly support from prenatal care to paid parent work leave and affordable (if not free) childcare. Finland perhaps sets the positive tone more than most countries. For 80 years Finland has kicked off parenthood with a baby box starter kit to every new parent. Valued at approximately €100 the kit includes many items from clothing to toys to help parents and baby get started.

While it is a welcome help, babies certainly require more than starter kit. UNICEF identifies Scandinavia, particularly Sweden, Norway, and Iceland, as setting the global standard for family-friendly policies that offer full pay for parental leave and a wide range of child services from birth to age six. Even with these polices and practices none of the Scandinavian countries have birth rates near replacement level.

Korea has the distinction of the world's lowest birth rate standing at 0.9 (not a typo). Between 2006 and 2019 Korea has spent an estimated $128 billion in prenatal subsidies and monthly baby stipends to new parents. Despite financial incentives Korea’s birth rate remains at the global bottom.

Even paid parental leave may not be an incentive to have more children. If offered, it may not be taken. Japan, for example, offers fathers a generous six months of paid leave. As of 2017 only 1 in 20 Japanese fathers took leave. Estonia offers 85 weeks of paid maternity leave. Despite these policies, Japan’s and Estonia’s birth rates remain at record-setting lows.

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A more holistic lifecycle view of what is likely to motivate couples to have children is offered by a recent US News & World Reportsurvey. The 2021 survey of global perceptions of which countries are the best for raising children considered eight factors in the scoring and ranking: human rights, being considered family-friendly, gender equality, perceived as a happy place, income equality, safe, and maintaining well-developed public education and healthcare systems. Note that none of the top ten nations scoring the highest in the survey have birth rates even approaching population replacement levels. Even Finland, number six on the list, and recognized four years in a row by the United Nations Sustainable Development Solutions Network as the world's happiest country, is well below the birth rate necessary to maintain its perky population.

Birth rates are inextricably linked to the longevity economy. As the world’s most populous country, China’s population policies garner more attention than most nations. Beijing’s policy change is an agenda-setting event for all industrialized nations and many developing economies facing demographic transition. Finding the optimal balance between young and old is far more than an economic question, it is a profoundly social and cultural challenge — one that alters the meaning and purpose of individual choice, family traditions, institutions, politics, and more. A prolonged drop in birth rates not linked to war, disease, or economic downturn is unprecedented. A defining challenge for governments, business, and families in the longevity economy will be understanding and navigating the dynamics of a world where the assumption of a steady and ever-growing supply of children may no longer be true. Moreover, policymakers and planners worldwide may discover that the decision to choose to have one, two, or even three children is about far more than national policy objectives and money alone.