Leong Sze Hian, Andrew Loh
The latest slew of measures by the Government to encourage Singaporeans to have babies is welcome. Deputy Prime Minister Wong Kan Seng, who made the announcements, hopes to create a “family-friendly” environment so that our birth rate will increase beyond the current 1.29. The replacement level is 2.1.
You can read about the measures in the Straits Times here.
They include bigger tax breaks, more protection for pregnant women in employment (a concern of many finally addressed), more childcare centres in the heartlands and longer maternity leave. It is obvious that the Government has been thinking long and hard about the issue and should be applauded for coming up with the measures.
However, one wonders if enhancements to the same incentives will work.
A different approach
Whilst the new incentives will surely increase the current procreation rate, I think it may not achieve the desired goal of increasing the procreation rate back to 2.1, which is the population replacement ratio.
I suggest a different approach to procreation, which may not cost the Government any additional funding.
From a statistical perspective, lower-educated women and lower-income households have always, and even now, tend to have higher procreation rates than higher-educated women and higher-income households.
Therefore, the new, and past incremental enhancements to various similar incentives, which may be skewed towards encouraging more educated and higher-income women to have children, may not be very effective.
For example, tax rebates of up to $70,000 can only be used by couples who pay tax, and about 70 per cent of workers hardly pay any income tax. The third and now fourth month’s maternity leave paid by the Government may utilise more state funding to those who need it least, and these people are also thus consequently not incentivised by the incentive. To illustrate this, a mother earning $20,000 a month will cost the Government $40,000, whereas one earning $800 will cost it $1,600. For someone earning $20,000, the incentives may not be necessary or attractive and thus may not be as motivated as those earning less. I suggest that the current funding for maternity leave be divided by the total number of babies born in a year, such that the payout will be a fixed amount, regardless of the mother’s income.
Make incentives education and income neutral
I believe one of the main reasons for the success of the Nordic countries is that incentives are neutral, and not dependent on the women or family’s income or education.
Another example is the baby matching grants. Some lower-income families may not have the money to contribute in order to continuously receive matching grants.
Last year’s slight increase in procreation to 1.29 may be due to the increase in the percentage of babies borne by foreign mothers to 35 per cent. If we take into account permanent resident (PR) mums, the procreation rate of Singaporeans may be even lower.
Anecdotally, it appears to suggest that foreign and PR mums are more likely to be stay-at-home mums, relative to Singaporean mums.
Discriminatory?
In this connection, I understand that none of the new enhanced incentives may apply to stay-at-home mums.
Further, it seems that the new slew of measures include one which may be perceived as discriminatory to Singaporeans. As TOC reader gtiong pointed out, and stated on the ecitizen website :
The amount of benefits that a child who converts to Singapore citizenship will obtain will be pro-rated according to the date of conversion.
This means that Singaporeans like gtiong, whose baby will be born in December 2008 while the new measures will only kick in in January 2009, will miss out on the incentives – unless they are pro-rated like those for ‘converted-to-Singaporeans” babies currently.
Housing policy
Perhaps one area which the Government should look at more closely is its housing policies.
One of the reasons why couples may not want to have babies may be because of the daunting prospect that they’d be taking care of the new-borns themselves. Of course, as parents, that is how it should be. Nonetheless, any kind of support is welcome. Would it thus be possible to further tailor our housing policies to encourage families to live together?
Presently, the Housing and Development Board (HDB) gives housing grants to those who live near their parents, even for singles. In March this year, it announced a new “higher-tier” Singles Grant of $20,000 for singles who buy a HDB resale flat in order to live with their parents. According to the Straits Times, the subsidy is “to encourage children to look after their parents while helping them get a bit further up the property ladder.”
Could a similar grant be implemented – that is, a grant for couples who choose to have babies and live with their parents? This is to encourage parents to live with their children who wish to have kids and to provide the couple a certain level of security and support for when they consider having children. After all, if using grants to encourage singles to take care of their parents can be implemented, why not a grant to encourage families to live together, on the condition that the younger couple have children within a year or two, say?
In order to allow the couple to have their independence, such a policy should stipulate that the parents can after, say, six years apply for a new HDB flat on their own with enhanced Government subsidies, leaving the new parents to go back to their own lives. The subsidies can then be the reward for the grandparents for helping their children care for the babies. (The PM said in his National Day Rally speech that the first six years of a child’s life are the most important and many parents would agree.) Perhaps we should look at having and caring for children as being more than a couple’s job. We should take a broader view of it being a family endeavour — that it takes a village to raise a kid, so to speak.
Learning from history
Historically, measures like the graduate mother and HOPE schemes may have not been very successful, because they may be relying on the wrong rationale — that we should encourage more educated women to have children, and less educated women less — through measures such as the ligation incentives under the HOPE scheme.
The above suggestions may seem like a radical change to our procreation policies, but they do not cost the Government more, as they simply shift the balance to equalising incentives to become education and income neutral.
In our view, unless we encourage those who statistically, traditionally and historically, produce more children, i.e. the lower-educated, lower-income and stay-at-home mums, and broaden the view of what it takes nowadays to have and care for children, incremental enhancements to the same incentives may not produce the quantum leap required to bring the procreation rate back to 2.1.
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Picture from Channel NewsAsia
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Looking at the current size if the HDB flats, I will be surprised why anyone wants to have more children. Where are we suppose to put the kids as they grow up? The cupboards? To know what I am saying, go down to HDB hub and figure out how you can put your parents and two kids into a 4-room.
Currently Spared,
I think in the long term, the Govt can introduce changes to how flats are built – in terms of design. Bigger flats for extended families is one. Right now, as I understand it, if you want a bigger flat, you can either buy one or convert yours and your neighbours flat into one (subject to conditions, of course).
I think it may be a good idea to review housing policies such as these.
On a more extreme note, just to throw up ideas, should we also have heavily-subsidised landed houses for anyone who have say, 5 or more kids? That’s something to think about. :)
Since we are on the subject of how to use more tax payers monies to buy medals to encouraging more babies, how about giving monetary incentives to people planning to pack and leave this country for greener pastures?
At least, if we failed to achieve the needed number of babies to replace the living dead, we can still stem the bleed of SINgaporeans from leaving?
After all, we seems to have breed a kind of people that wIll do anything for money? lol
Hi Hi Hi. Some chinese saying which goes like this : Human count may as well heaven count. In short, there are things that human will never know and cannot predict. They keep thinking that $ and carrots (perhaps a few more) are the only variables going towards any results that need to be achieved.
They are like headless chicken moving aimlessly.
Economics is but a small component of life.
“so that our birth rate will increase beyond the current 1.29. The replacement level is 2.1. ”
I wonder who prepares the numbers?
I am neutral.
Andrew/Leong
The government policy on procreation has come to late and too little to make any difference unless there is a revolutionary rethink of economic policy or wait for the problem to ride itself out.
The government’s economic policy of growth for growth sake means that it will have no choice but to rely on foreign investments or labour. In the Singapore context the reliance on foreign investment and labour is far greater than any other countries. And to top it all, what you have now is a economy trying to be a first world country in living standard but at the same time fuelling that living standard with low costs labour.
To meet these twin goals, it will have to ensure there is a pool of low cost labour and that is not going to be met by boosting birth rate, which is not a short term solution.
Also it would be extremely hard pressed to pile any more so-called pro-family legislature without causing backlash from businesses. For example, the extended maternity leave will very unlikely to be easily enforced. Businesses can easily discriminate against mothers, which is likely to be local, by simply not hiring or promoting women. And with a lax overseas regime can easily just make the case for overseas labour.
To break the cycle, and say adopt the Scandinavian model, not only the government but also the Singapore electorate will need to a different mindset. One that emphasised a sustainable economic policy not a growth for growth sake policy. Also not one that accumulate wealth for the sake of it but one where wealth is meant to enhanced life.
Politically, the government is in a bind for the PAP depends on growth as it legitimacy to govern. So anything short of returning sterling growth will be disastrous. Adopting the Scandinavian model will be an anathema to the PAP’s social policy of self reliance. Besides, many in the PAP are too blinkered to see the value of the Scandinavian model but will instead focus on the cost. So within the party it is unlikely to sell such a model.
Outside the party, the business community in Singapore are too used to low taxation and loose legislation to contemplate the Scandinavian model. The PAP or for that matter will face a revolt from the very base (i.e. foreign businesses largely) from which they draw power.
There is also a myth that Scandinavian system itself is also less stressful than Singapore. The stress is manifested differently. In the Scandinavian system, their commercial strength lies in highly productive labour force to feed the economy. To sustain this level or productivity, you will need to a highly creative workforce, which can be a stressful prospect itself. They labour productivity (in terms of output value to labour cost) far outstrip Singapore’s.
An anecdotal evidence was provided by a Swedish colleague who noted, when he worked in Singapore, how in people in Singapore seemed to spend more time be in work (or pretending to work) and producing nothing or something of low value than his own countrymen. Even in the sphere of entrepreneurship the Scandinavian countries were able to generate more new businesses (world beating ones) than Singapore in quite a number fields (music — ABBA, IT and biotech).
There is no best fit. But rolling out improved incentives nevertheless help in one way or another. Continuous learning from other countries’ success stories in creating babies is crucial to ensure that Singapore’s baby policy stays relevant and holistic.
At the end of the day, it is true that $$$ can’t buy babies. It is still up to individuals/couples.
Cheers! :)
This is sooooo wierd! I feel that you might as well be sitting next to the room to make sure your children are pro-creating! Single woman with baby (yes, single by choice) got money cannot even rent or buy HDB flat leh. Where’s the genuine support for women with kids!
The government will again worry there’s NOT ENOUGH younger people to take care of the old because the old were born at the time when “more children” were encouraged.
What the government should say is: HAVE AS MANY CHILDREN AS YOU DEEM FIT ACCORDING TO WHAT YOU CAN AFFORD AND WHAT YOU’RE WILLING TO SPEND FOR THE CHILD.
The government should not encourage people to have children for the greed of money or when they are not emotionally and mentally ready for kids.
Mortality (I hate to say this word) and Singaporeans who immigrate will “balance” the population nicely! >,<
Well, I mentioned earlier in the article Feeding our babies to the economy monster on July 24.
I would have hoped the policy makers consider an open book system, where we get to know their detailed rationales how each baby policy was arrived. The fact that the results are not forthcoming (compared to other countries) for years meant there is at least 1 critical flaw in the policies.
I stand corrected, but so far I have yet to see the entire thought process of such rationales being made known on previous policies. I have also not seen them this time round when the policies were announced.
TAK,
Thank you for your views.
As a senior citizen, I have only one regret – I wished I had many more children but the Government’s penalising policies then were very discouraging.
It is indeed too little, perhaps – “peanuts” (money @ S$600,000 pa no enough) can help, and feeling cold sweat with all the calculations!
Yeh, it is too late to reverse the trend with Singaporeans ; perhaps not too late with “FTs”. The future is going to be quite like an emotional roller coaster……….
I was reading Friday, 22 Aug 08 Straits Times this morning. The Home section was reporting on some parents trying to enrol their UNBORN INFANTS into some popular kindergartens. Some of these kindergartens can cost as high as SGD1000 per month.
I am not going to be convinced to give birth even with all the baby bonus extras given. I’ve seen & heard about a lot of cases whereby married children with families refused to take care of their elderly parents. Should we not have policies that take care of elderly people first before asking young couples to give birth?
Anyway, as the economic is slowing down I do not see the rationales for implementing these policies now. Small companies who does not have much financial backups may just start retrenching people now or refuse to hire woman who intends to give birth.
I envy a friend who intends to marry an Australian citizen soon. I hope she’ll be able to settle down nicely over there & have as many kids as she wishes.
will these new measures to boost storks divide the people further? will there be new resentment towards preggies in the work place?
in our desperation at social engineering, i hope we don’t add to the widening chasm between the haves and the haves-not, the us and the they and ..those with babies and those wih barbies?
13) wondering on August 22nd, 2008 10.02 am
“in our desperation at social engineering, i hope we don’t add to the widening chasm between the haves and the haves-not, the us and the they and ..those with babies and those wih barbies?”
Social engineering ? The enginer too much lah, engineer this and engineer that. LIke a sick man taking many types of medicines, with each type of medicine to counteract the side effects of another medicine.
About 2/3 of the population fall in the middle class income bracket. If you think about it, do you think couples seriously need tax payers monies to help elevate their financial burden in having kids? Even the struggling 20 percentile are giving births come bulls or bears and…some are having 5, 6 kids. Though it may not be prude to bear what you can’t afford, but because they wanted a large family, they make do with very little assistance and still get by.
You see, having kids should be a natural progression for couples and most can afford to have at least two kids if they so wished. So why is the govt throwing good money at these people for having kids when taxpayers monies could be used for more challenging needs?
If couples don’t want to have kids for whatever reasons, this token amount will not move them. Furthermore, do we want to encourage births for all the wrong reasons?
There maybe some on the fringe who could genuinely appreciate state’s money to help them along but the number, i suspect, are few( these could have been assisted on a case by case if need be). So effectively, we are throwing good tax payers monies, which could have been put to more worthy uses, at many couples who already are financially able and willing parents come what may!
It seems like, even in giving births, the rich are…well, getting richer for it. Now I am not saying we should not help couples who want to be better parents but, most do not need a financial windfall for doing something that comes naturally to them.
Aids should be given to ‘fringe cases’ only.
That said, how many want to wager wasting tax monies on these (mostly) generally well to do couples will help save this country from falling birth rate?
Please.
Hi Andrew/Leong,
I agree with most of your suggestions, since this is how most of us would do in our work place. I mean, segmentize your customers (potential parents), and analyze which customers would give you the highest yield for your limited marketing budget, in this case number of babies per couple.
These would be the sensible things to do, PROVIDED the govt is genuinely interested in getting higher birth rate, regardless of mother’s educational background.
I’m afraid the govt’s unspoken agenda is still to get more babies from educated parents. It would be naive to assume that the govt, with all those trained economists, would have missed what you have suggested.
Anyway, good work, and keep it coming.
Regards,
If our birthrate is falling…why is the BoonLay Interchange and Jurong Point getting more and more crowded by the month!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
>>>>Quoted by Kenwood: I’m afraid the govt’s unspoken agenda is still to get more babies from educated parents.
More like ‘from married couples’ or “divorced indiciduals”. There are many well-educated (especially those above 35) who would not hesitate to have kids without any marriage ties.
i think such baby incentives will never solve this falling birthrate problem in the long run, maybe so in the short run eg 1-2yrs but definitely they will regret.
If I were the govt, and I see that there is a pressing need for people to start work and pay taxes on time, why would I waste time waiting for babies to be born and then grow up to being able-bodied working people 30yrs later? Might as well get foreigners in and the result is immediate.
The main thing for low birth rate is not because of the absence of low incentives, but rather is the big picture – the economic environment of Singapore.
50yrs ago, during my grandmother’s time, there weren’t much baby incentives but still she had 7 children – 5 daughters and 2 sons to be exact – and raised them single-handedly (my grandfather passed away at an early age of 38).
Now in 2008, you see most couples having either 1 or 2, very little having more than 3. That’s due to the INCREASING COST OF LIVING.
In short, the govt has to wake up their idea and realise that it’s not the incentives that’s going to solve this problem, rather they have to lower the INCREASING COST OF LIVING.
Totally agree with Jason (#20) – the increasing cost of living is main reason.
Second reason I think is not planning for parenthood and a shortage of parenting courses (no, I am not joking). Many first-time parents are lost without some guidance in baby-care and child discipline. They either over-rely on maids/parents/in-laws or they “suddenly wake up one day” to find themselves with rebellious kids.
Look around you – some of those who can’t afford children are ‘sprouting babies’ like nothing. Those who can afford are not having any. And many are having babies for all the wrong kinds of reasons – to spite an ex-boyfriend, etc. (God bless those who know what they’re doing!)
When in my parent generation, government DO NOT encourage them to have more than 3 babies, if they have more than 3 babies, the 4th 5th 6th babies would have to PAY a FINE, well i do not know how much is the “fine”, neither my parent, well i am that 4th CHILD(fine baby), so pathetic, no edusave and yet my parent have to pay a FINE. So envy of those new born babies and lucky parent to enjoy those incentive!