East Asia’s Population Crisis: Solutions

By Asia Pacific Memo on March 3, 2011

Memo #61

Terence Roehrig – terence.roehrig [at] usnwc.edu

Japan reported missing 230,000 centenarians in September 2010. This dramatic news highlighted among other things, the rapid aging of Japan’s population and its low total fertility rates. For the past decade, demographers have called attention to the impending population crisis in East Asia. Several countries saw fertility rates plummet to well below 2.1 births per woman – the rate required to sustain a population, assuming all other factors remain relatively constant. The problem has been compounded by increased life expectancy and the lack of immigration flows to compensate for birth and death rates.

Many unsuccessful solutions to address declining birth rates have been pursued. The Taipei city government pays bonuses for having children. In Singapore, couples receive monetary bonuses and special savings accounts where the government matches contributions until the child turns six years old. In South Korea, the government subsidizes child care for low income households and provides tax breaks for families with more than two children. The Japanese government provides subsidies and encourages businesses to develop family-friendly policies.

Several factors explain why pronatalist policies have shown little success. First, in many cases, the incentives are insufficient to offset the costs of having more children. One-time bonuses or subsidized child care for a period of time will not offset the long term costs of rearing a child to adulthood. This is particularly difficult in countries where the cost of educating a child is extremely high. Young parents accustomed to a certain level of comfort are reluctant to take on these added financial obligations. Second, there are significant social and economic incentives for women to avoid or delay having children. It may be difficult for governments to provide sufficient monetary reward and support to counter these motivations. Finally, pronatalist programs are costly to implement. Increasing the incentives to the point where they would make a difference would be a serious burden on already strained governments.

Governments need to be more creative or offer larger financial incentives if they hope to change current demographic trends.

About the Author:

Terence Roehrig – Professor of National Security Affairs at the U.S. Naval War College.

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