Living Smart

115 Whole new world to fixing birth rate woes Prof. Stuart GIETEL-BASTEN Associate Dean, Humanities and Social Science, Professor, Divisions of Social Science and Public Policy, Associate Director of the Leader and Public Policy Executive Education Program M any governments are now scrambling for ways to encourage child birth to halt population decline and provide remedies to an aging population. Immigration, once the most popular way to recruit skilled and unskilled labor to fill roles, has become less and less desirable due to the rise of populism and concerns about integration and sustainability. Recently, some economists raised eyebrows with proposals to add a “maternity fund tax” in China, where couples would effectively be penalized for not having children, much to the criticism and chagrin of netizens and the public. Such desperate proposals, often flavored with monetary means, have become popular among policymakers, but empirical data suggests that they have often failed to live up to their billing. A good example is Singapore, which has been aggressive in providing monetary incentives to encourage child birth and has met little success so far; in 2015, the birth rate of Singapore was a dismal 1.23, which is almost identical to Hong Kong’ s 1.2 in the same year. The effectiveness of policies to encourage people to have children, frankly, is difficult to measure and evaluate. While societies tend to value a particular policy’ s effectiveness in a matter of a few years, the true effectiveness of a pro-natalist policy cannot be known until an entire generation of women has passed their childbearing years, which may be 15-20 years after a policy is introduced. Scaled over time, and one would find that birth-rate policies frequently provide a false positive: the birth rate in Russia spiked for much of the 2000s, but many can argue it was only a new “normal” after years of turmoil surrounding the former Soviet Union for much of the 1990s, which brought the country’ s birth rate to an historical low. If they are concerned about having one of the lowest birth rates in the world, policymakers in Hong Kong can turn their focus on more successful cases elsewhere. European countries with a relatively high birth rate, such as France, Sweden, and Norway, do not implement specific incentive-laden child birth policies, but offer a comprehensive set of policies to support not only parents but all citizens, namely, better maternity compensation, a matching division of parental responsibilities between spouses, sufficient health care and hospital infrastructure, and better living conditions/work-life balance for their residents. Incentive policies are deceptively attractive because they are easy to implement. But the ultimate challenge lies in creating desirable living conditions where residents feel enabled to balance work and family without unduly penalizing either, or themselves. Published on September 19, 2018