Drastic action needed to raise the birth rate

PUBLISHED : Sunday, 07 May, 2006, 12:00am
UPDATED : Sunday, 07 May, 2006, 12:00am

Few trends raise as many questions about the future shape of society as a falling birth rate and an ageing population. How will a declining number of working-age people meet the cost of supporting a growing elderly population that is also living longer? Should the retirement age be raised to encourage older workers to stay in their jobs longer? These are just two of them.

Hong Kong's birth rate last year was 0.9 per woman, compared with nearly three per woman in 1980 - far short of the 2.1 needed to keep the population level. We have relied on immigration from the mainland to maintain minimal population growth.

Western European nations faced this growth pattern first and the phenomenon has been seen in Singapore, Taiwan and South Korea. Young people everywhere are increasingly putting financial security and lifestyle before marriage and children. In some European countries, such as France, the response has been to subsidise child-rearing heavily, with generous maternity leave and allowances for everything from transport to education.

Such benefits have been made possible only through higher taxes. It is hard to see Hong Kong taking this direction, with its attachment to low taxes and aversion to anything that smacks of welfarism. Nonetheless Donald Tsang Yam-kuen surprised people last year, before he became chief executive, when he suggested the government would push for a three-child policy, and the government's Central Policy Unit has been looking at possible incentives for couples to have bigger families.

It makes a change to see an approach to the issue that does not involve social engineering. As we report today, the Hong Kong Family Planning Association is to launch an education and advertising campaign to persuade hesitant couples not to wait too long to decide whether to have a child.

Typically they are career couples who marry late and then dither over whether to have a family, until they have left it too late to conceive or need the help of in vitro fertilisation treatment.

The aim of the campaign is to help these couples make educated, timely decisions on fertility issues. If it helps reverse the low birth rate at the same time, that will be a bonus. It is certainly targeted at getting the attention of professional couples who are preoccupied with financial issues, such as the cost of raising a child and paying for the best international school and overseas university education. One professional couple puts the cost at $11.67 million at today's prices.

Given sums like these, it is no surprise that the French have found that even their generous incentives have not raised the birth rate enough to sustain natural population growth. In the end there may be no alternatives to enlarging the workforce other than to redefine old age and allow more immigration.