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baby boom

In France, have six kids and ride the rails at a 75% discount. How government can boost birth rates

Lee Hsien Loong, the prime minister of Singapore has said the Asian city state is in danger of becoming “a retirement home” unless its citizens get on and have more babies. He is not the only leader of a developed country that should be worrying about this. Fertility rates have dropped all over the developed world. Germany, for example, has an average birth rate of 1.4 children per mother. Stronger Asian economies and some emerging markets have as much of a problem as struggling European ones. In Hong Kong, the average birth rate is 1.1 child per woman. In South Korea, the rate is 1.2, according to World Bank data. In Russia, 1.5.

Around 37% of Hong Kong’s population will be over 60 by 2050, according to the UN (pdf), along with 39% of South Korea’s and 34% of China’s.

All other things being equal, populations generally shrink when birth rates are below two children per women. And the burden of supporting an aging populace falls heavily on younger generations in countries with lower birth rates.

So what can governments to do get their people producing more babies? A mixture of bribes and balancing gender roles is probably the key.

Longer paid maternity leave.  This OECD study from 2007 (pdf) said: “Research for 16 OECD countries over a 20 year period shows that birth rates are high in OECD countries where cash transfers to families are high [and] replacement wages during parental leave are high.” It adds: “birth rates are higher in OECD countries with a higher enrolment in formal childcare.” Developed Asian countries which pursue business-friendly growth policies often get this wrong. In Hong Kong, companies only have to give mothers 10 weeks paid maternity leave. Singaporeans get between eight and 16 weeks. Sweden, which gives parents 480 days paid leave per child to be shared between mother and father, has a an average birth rate of two children per woman, World Bank figures show. Sweden’s social insurance system pays for the leave. Hong Kong and Singapore, which often run budget surpluses, could do something similar.

And a strong culture of paternity leave. What 30-year-old professional woman in the UK or the US has not faced that job interview question “What are your life plans for the next five years?” and been tempted to say “I do not plan on having children.” American women are told that delaying childbirth is good career planning. Simon Murray, the British chairman of UK-listed commodities giant Glencore, said last year he did not like to hire women for senior roles because they may get pregnant and leave.

In Sweden, as this study shows (pdf p.1) because both mothers and fathers are encouraged to share parental leave between them, women are less likely to delay childbirth for career reasons. Imagine a workplace where a man take as much time off to care for children as women do. Naturally, female workers would not see maternity leave, or even the potential of it, as a career killer. And employers who share Murray’s prejudices would be less likely to avoid hiring women to avoid paying for maternity leave if paid paternity leave was as much of a possibility.

Singapore’s Lee should take note of this last point. It is a heavily aired complaint in Singapore that fertility is low because men have not taken to child rearing and maternity and paternity benefits are unequal.

With lots of family-friendly subsidies France has many, and a healthy birth rate of two children per woman. Anyone who has spent time traveling on the French railway will notice there are children running around everywhere, thanks to the famed “carte famille nombreuse” (French) which gives families bigger travel discounts, the larger their brood. Those with six or more children get a 75% travel discount. France also has universal, heavily subsidized free preschool childcare. While Americans and Brits have big struggles juggling work and family, French families have it easier. Germany has a much lower birth rate than France. That’s no coincidence: its day care system is not so good.

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