Tuesday, January 26, 2010

Singapore's declining birth rate

Singapore's birth rate continued to decline in 2009. The Prime Minister blamed it on the economic crisis. But, the birth rate has been falling in good years as well. The various incentives introduced by the Government during the past two decades failed to work.

My "common sense" observations and talking to ordinary people tell me that families are having less children due to the following reasons:

- High cost of living
- Insecurity of jobs
- High cost and burden of educating the child
- No fun for children to take the pressure of childhood

The complicated incentives, to give different benefits to different child according to birth order, year of birth, status of mothers and many other factors did not help.

We should not blame this situation on the modern lifestyle. While the birth rate is falling in other developed countries as well, the situation in Singapore is among the worst in the world. We are seeing the outcome  of our social and economic policies.

To improve the birth rate, I would prefer to implement the following measures:

- Have the cost of raising two children in each family to be borne by the state, and not be a financial burden for the family
- Change the education system to avoid the competition to be top, but to educate our young to be literate, numerate, have social skills and character and to play.

Tan Kin Lian

37 comments:

Anonymous said...

Most Singaporean families hire a maid only when they are expecting a baby in the family. And an extra pair of hands are needed in looking after the child.

So what happens?

The families have to pay the maid's levy, which is $170 per month. The maid's levy is increased to $230/month when the child reaches 12 years of age.

So in effect, there is a $170/month tax or $$2,040 per year tax for having a child. Pro-family policies? Don't make me laugh. It's a taxation scheme.

The same logic applies for looking after your elderly parents by hiring a maid. You are taxed $2,040/year for your filial piety.

You call these policies pro-family? Filial piety? Asian values?

I call it an Asian values taxation policy.

Anonymous said...

REX comments as follows

I fully agree with your analysis and the positive actions which you had recommended. (Any opposition party who implements some or part of those policies you suggested will immediate have my support).

Additionally, i wish to comment that one of the issues of "high cost of living" can immediately be mitigated as follows: abolish foreign maid levy.

Many people defer having a child because they have no time to look after the kids when both are working. For various reasons, many couples may not have the advantage/privilege of good caring parents to look after the baby or toddler when both are working. So a maid is quite necessary for the first five year's of baby's life.

Yet we have to pay government tax on the maid at $170 "CPF levy".(incidentally i wonder why it is called CPF levy, i dont understand?). This is about 50% of the maid's salary - the tax go to feed the government, this is pure profit for the govt since govt incur ZERO cost maid or no maid.

So if couples do not feel secure and able to provide for the baby in its first four or five years, they will defer their god given functions.

I calculated that i had by now paid about $25,000 to the government already in the domestic levy. It helps to support MM's salary, no doubt.

The original aim of the levy needs to be examined - purportedly it was to reduce the impact of foreigners into our culture, but then this theory is thrown to the winds now with the large scale immigration policies. Our social fabric is stretched anyway. Why not immediately abolish the foreign maid levy if a maid is required to help in domestic matters such as baby sitting and helping elderly parents?

I suspect the government just can't do that because they count every dollar and cent to make sure there is enough money to feed the salaries of the King and little kings.

Yet they urge us to go forth and multiply and blame us for not producing enough. Pathetic, hypocritic imbeciles.

zero

Anonymous said...

Recession, blame US i.e. external condition not controllable.

Low birth rate, blame economic crisis.

DBS HN5/Minbond, blame investors for signing on the dotted lines.

High foreign workers, blame locals for being lazy.


Looks like MM is correct, even his son complaints even though they are the paid million a year.

I remembered the last Ministers' pay raise, PM ask to public to measure their performance in the next election. Doesn't seems to impress as of now.

Maybe the typical solution to save face is to put out a survey to show that many countries are facing the same problem, especially Japan. So PM & cabinet is not to be blame while justify to continue to collect their million $ salary. Maybe should reward them with some pay raise because they are able to come up with a comparison table to say that they are not as bad as first thought.

What the.......

jamesneo said...

Beside changing the education system. One important thing that need to be changed is the scholarship system of hiring and education for the undergraduates. In singapore many parents have "planned" from the start to get their children to top primary school, secondary schools and JC so that their childen can get the scholarships for the cushy job in the public sector.

Mr Tan ,the solution you gave can solve the:High cost and burden of educating the child and No fun for children to take the pressure of childhood problems but the main reason i think the situation has worsened in the past decade are the first two reasons you mentioned:
High cost of living and Insecurity of jobs
i feel that some of these problems can be solved by progressing the country towards the social democracy that you have mentioned earlier.

The crisis has shown that the American capitalist growth at all cost model might not be the best. It might be better to get a balanced model based on the best of both capitalist and socialism. I think that some of the European countries have managed to strike such a balance.

Robert Tan said...

The problem of getting the state bear the cost of raising 2 children is how to arrive at a reasonable amount that the state should bear. A few points to think about:

1. The state is already bearing some costs through various subsidies in school fees, child benefits etc. Are we saying that the amount of subsidies should be increased and if so, by how much and in what manner.

2. A lot of the costs of raising a child is discretionary. To some, $500 per month is sufficient for a primary school kid and maybe $700 per month for a secondary school kid. To others, it may cost a few thousand dollars a month because they want to send their kids for enrichment classes or private schools, either locally or overseas. Where to draw the line? Where is the limit?

3. I suspect that, from the costs angle, for many who are not having kids, the reasons are less the direct costs of raising kids, but rather the opportunity costs of having to sacrifice(partly or wholly) career ambitions and lifestyle changes.

4. Having children is much more than money. Money is important but it should not be given more emphasis that it deserves. Do you love kids in the first place? Would you be willing to sacrifice time etc to bring them up properly, to give sufficient time, effort, care and love for them?

5. Competition will exist regardless of our education system because we are by nature competitive, especially in a meritocratic and capitalist society. Almost everyone wants to get ahead in life, at least from the materialistic standpoint. One of my friends migrated overseas for a less stressful and competitive environment for her kids. At least this was one of the reasons given for migrating. However, after migrating there, she sends her kids for many enrichment classes as well as additional private tuition. Why? So that her kids can be ahead of her peers in her school and can get into good schools as well. And I heard they queue up for the best schools from the time a kid is born. So is life any less competitive there? Even if the education system is less competitive, competitive parents will still push their children further by giving them extra lessons, homework etc.

6. As I said before, many things we can't control, but there are also many things that result from our own choices. The government can only encourage and have supportive policies(within reasonable means) but the rest is personal choice.

Anonymous said...

Hi Mr Tan!

I observe there must be a good number of couples who do not want children for the reasons you've mentioned but I would like share other perspective and may drop a hint for all interested parties of our government to investigate.

I have a few friends around the late twenties and early thirties who wish to conceive and have consulted numerous doctors and spent money each year that will give them a few good trips to europe should they wish to. When I accompany a family member to such clinics, the queues are long and appointments almost impossible.

There may be other factors that result in low birth rates besides the economic reasons. I feel sorry and unjust for my 'longing for kids' friends and relatives when I there is propagation of such news in the media.

Tan Kin Lian said...

Hi Robert Tan

My proposal has been stated earlier in my blog, maybe one year back or longer.

I have a simple formula. The mother should be given $500 per month for each child until age 16 years. This should cover most of the cost of raising the child, and part of the opportunity cost for the mother to stop working.

I do not consider enrichment courses to be necessary, and need not be paid by the state. But, I like basic health care and education to be virtually free for the two children.

I do not believe in writing complicated formula to identify who qualifies for certain items. I prefer a similar formula to give the basic needs for all children and their parents.

Tan Kin Lian said...

Hi Robert Tan

A few words about the competitive environment. If the society give more security and fair wages to people at various levels, competition will reduce, and it will be better for society.

I prefer a society that is based on social democracy, rather than a competitive environment.

Msny of the countries with the best quality of life, according to International Living survey, are social democracies in Europe. Even Australia and New Zealand are more socialist compared to Singapore, and they give a better life for their people.

Robert Tan said...

Dear Mr Tan

Thanks for taking time to respond to my comments.

I think your first proposal seems reasonable. However, although I have not actually worked it out, the current subsidies and tax incentives(depending on the income level of the working mother) and baby bonus may in the end work out to not be not very far from $500pm up to 16 years old. Maybe the $500 should be on top of the current benefits and subsidies.

As to your second comment, it does not sound unreasonable. I guess it merits further thoughts. And sometimes, the answer may be somewhere in the middle ground. Most things are good in certain aspects except when they are taken to the extreme.

C H Yak said...

I think there are both time and cost constraints to consider.

The Govt is seldom bold in its implementation.

To save costs, the Govt tagged incentives to various complex conditions as explained by MR Tan. I agree that the approach should be simple.

The Govt seldom review old irrelevant rules. Up to now, I could not understand why only one child can claimed tax relief for supporting parents under our Income Tax rules. Obviously this rule does not support our argument to have more children in a way, but the Govt is still retaining it to collect more revenue.

I consider the Govt is never bold when it comes to alleviating "time" constraints for working parents. I had written to the press to highlight that it is necessary to restrain the number of working hours.

Although our Employment Acts support a 44 hour work-week, only the lower income workers are protected. This restricted number of working hours is also to cater for over-time compensation calculation. The Govt is relunctant to actually restrict the actual hour worked. Many PMETs earning above the salary cap governed by the Employment Acts usually work much longer hours.

The Govt is selfish by implementing this restraint and 5 day week for Govt offices only. It should also control the private sector and help employees in this sector; rather tahn leaving it free to employers. With a muted NTUC, a big section of the population I believe is still working more than 44 hours per week.

jamesneo said...

By looking at the UN total fertility rate Ranking, we can see that singapore maintains a ranking of 186 in fertility rate in the world. it has reached 1.26 for the period(2005-2010)It is even worse if we just look at the 2008 data where it is now 1.08 the third lowest. We can see that among the developed countries whereby their immigration policy is not as liberal as ours their fertility rate has increased or stabilised instead. For ex :Sweden from 1.67(2000-2005) to 1.80(2005-2010)
France 1.88 (2000-2005) to 1.89(2005-2010)

It is important for us to study why these countries can increase or maintain their fertility rate instead of following the liberal immigration policy that USA can use which we cannot.Immigration can solve the workforce number for the present but we are just delaying the problem for a few more years and these new citizens would grow old and aggravate the aging problem.

Anonymous said...

The more foreigners they import, the worst the situation would be to have a baby.

Anonymous said...

The Malay families are doing well in this aspect. Is there anything that other races can learn from them.

Anonymous said...

With regard to maid's levy, the working mother can claim twice the levy amount as her tax relief.

Also the working mother's relief and combined with the Parenthood tax rebate can be so huge that parents do not need to pay income tax for a very long time.

Notice many inaccurate and anti-government postings. Before jumping to any conclusions, always check the facts first.

Tan Kin Lian said...

Hi 6:17 PM

All these reliefs and incentives did not work in improving the birth rate. They give more benefit to working mothers in high salaried positions, and they are not likely to be interested to have more babies.

I do not like the unfair way in which the reliefs were designed.

Anonymous said...

Anonymous 6.17pm is to be commended for adding balance to the discussion.

The weakness of 6.17pm's argument is that the working mother has to be able to keep her job during and after her pregnancy to enjoy those income tax reliefs.

No job means no income. No income means no income tax to be paid. No income tax means no income tax reliefs.

A tax relief or rebate is not the same as a cash rebate. A tax relief is not the same as cash. Try paying for your NTUC supermarket shopping with your tax relief.

Given the unfair dismissals against pregnant women in the workplace, these income tax reliefs aren't much use.

Robert Tan said...

I think there may be a few reasons for this:

1. The higher income working mother has greater opportunity costs when she sacrifices part of her career ambitions.

2. A higher income working mother probably has greater econoimic contribution for the economy, so, the tax incentives are to BOTH encourage her to have babies AND to remain in the work force to continue her economic contributions.

3. Ideally, the ones who can economically afford to have more children should have more children because they have the economic means to ensure the children have the best(at least materialistically) provisions in life.

4. There is still a school of thought(whether conclusive or not, I don't know) that genetics and hereditary traits contribute to ones offsprings and this could include intelligence, capabilities etc. (The age old debate of nature vs nurture). Therefore, for those who believe this to be the case, it is important that the "more capable" in a society should reproduce at a rate that is at least in proportion to the rest of the population. More often than not, such a view may not be politically acceptable. So, since capable women reproduce less(assuming that this is statistically true), we must try to target this group more.

Taking into account the 4 points above, the way the reliefs are may not be that "unfair" after all.

Anonymous said...

REX comments as follows,

To anonymous, thank you for reminding us that tax relief actually neutralise the maid levy. Mathematically perhaps you are correct. But from a philosophical point of view, what is the purpose of a maid levy? It sends a message that we don't encourage maids in singapore?? Like ERP, you want cars to take a different road, there is a purpose to tax the drivers, and drivers respond accordingly so the traffic conditions improve (in theory).

What is the purpose of Maid levy, if at the end of the day it is nulled by the rebates? Why make life so difficult? Just abolish it. Someone said above, the government does not have a policy of looking at ancient rules, it is not interested at all to improve anything which is status quo and been around for some time.

If the governemnt policy makers are poorly paid, then we can accept our fate and dont expect too much. But this is Singapore, super efficeint city. Is it so difficult for one hardworking civil servant or high level minister to just say and order their staff to abolish the maid levy straight away? It send a signal of pro-family policy and that is what walk-the-talk means.

You can't blame people for throwing bricks at the government if they play games with maths, and use the levy than use the rebate, it is so theoretical, and abstract, - and it is so inefficient and circuitious way to achieve a result. Surely for such a highly paid government,we deserve something better?

REX

Anonymous said...

Imagine you are running a country. Which of the following looks more attractive:

1) Give money to Singaporeans to have a baby so that 21 years later, you have a productive worker.

2) Grant a foreigner an EP and start collecting taxes from the foreigners immediately.

Anonymous said...

Mr.Tan,
I hope you can form a party soon and be ready for the coming GE.
Over here you are only writing down your wish-lists but can't implement them.If you are voted in,at least you could share your mind with them or who know you may be the decision maker who set new policies for the betterment of our country.
I wish you well.
Best Regards,
Store-keeper in JE area

Anonymous said...

Concerning Robert Tan's point 4

"So, since capable women reproduce less(assuming that this is statistically true), we must try to target this group more."

On closer examination, I find Robert Tan's arguments elusive at best, deceiving at worst.

Just how do you define capable?

If the capable (presumably you mean academically capable) were really that capable, then why the need for subsidies?

It would be equally valid to argue that academically capable women have inferior genes. And natural Darwinian selection is deliberately trying to weed out such inferior women by bestowing weak reproductive powers upon them.

Unfortunately, our pro-graduate policies is interfering with natural selection. And as a result, Singapore's fertility rate is falling. And Singapore's genetic pool is tainted with the genes of women with weak reproductive powers.

The pseudo-science of eugenics went out of fashion when the fascist governments of Germany and Italy lost the 2nd World War. Unfortunately, it seems to have taken root here.

Worth a look.
http://en.wikipedia.org/wiki/British_Union_of_Fascists

Recognize anything familiar?

Anonymous said...

let me say something about job security. On top of the pay being depressed by imported labor, Is it just me, or are we moving towards a "contract" based employment? seriously, who feels secure if your contract is only for a few years, and they can dump you aside for cheaper labor, just by saying they will not renew your contract?

now translate that to birthrate? who would feel secure enough to have kids, when you are preoccupied with the notion that you will likely lose your job in a couple of years?

Anonymous said...

The Parenthood tax rebate (it is a rebate, not relief) can be used by both couples - husband included. Wife don't need to work. With careful tax planning, the husband need not pay tax for a very long time.

A non-working wife shouldn't employ a maid as there is already someone to look after the children. So maid levy relief shouldn't be an issue if there is no maid.

Many imbalanced and extreme views here.

Anonymous said...

To 1.07am.

In this new work environment, "contract employment" may be more secure in the sense that it is very clear contractually what the terms of employment are.

And you the employee enter into such an arrangement with your eyes wide open - you are not deluded into thinking you owe your employer a living by being loyal and working extended hours for free.

As a "regular" worker, you have no such contractual protection, especially if you are a PMET. Remember the employment letter you signed when you are first employed. It's one month's termination/resignation notice by both the employer/employee. No reason need to be given. It's an open invitation to employers to sack PMETs to cut costs. The one month's notice is cheaper, better faster than a proper retrenchment exercise (Singapore's retrenchment law requires 2 weeks pay for every year worked by the employee).

So what has your MP done for you lately?

When it comes to employment, Think mercenary and global. Not loyalty and local.

Anonymous said...

It certainly can be argued that the pro-graduate women policies represent a form of eugenics policy.

"Eugenics is the study and practice of selective breeding applied to humans, with the aim of improving the species."
Source:
http://en.wikipedia.org/wiki/Eugenics

And here is a reminder of eugenics sinister history.
Source:
http://en.wikipedia.org/wiki/Nazi_eugenics

And despite all our efforts at eugenics, Singapore has the highest incidence of short-sightedness and one of the lowest fertility rates.

Maybe the genes that propel a person to great academic achievement also creates weakness in the eyes and reproductive powers.

Tan Kin Lian said...

Hi 7:34 AM

There is no need for you to label other people's views as being extreme or imbalanced. Normally, I censor these type of postings containing these type of comments, especially if it is made anonymously. In this case, I allowed it.

You said that the parenthood rebate is available for the family, and not only the working mother. This is true.

It is part of the "eugenics" policy, adopted for the past 25 years, that has produced a failing birth rate for Singapore.

Anonymous said...

http://www.straitstimes.com/BreakingNews/Singapore/Story/STIStory_482735.html

"Birth rate may dip more"

All these years, PM presented the above data. Year after year, things are not any better. In short, the responsible person is not successful in solving this problem. Since PM is the boss of the Ministers, I wonder why the responsible Minister is still getting millions of dollars of salary and pay increase. He is BASICALLY NOT PERFORMING.

Same goes to the minister for MAS for allowing toxic structure notes to be sold in Sgp that causes huge losses of retirees hard earn saving.

Why talk about productivity, Cheaper, Faster and Better when nothing change to the productivity of MPs and Ministers. Always easy to shout from the top while the bottom take the heat...

Talk is cheap but in our case, the above comes from very expensive mouths with 6 figures salary every month.....

Anonymous said...

Mt dear pampered 7.34am
" A non-working wife shouldn't employ a maid as there is already someone to look after the children. "


You are obviously a male who has never had to look after your ageing parents. So you never had to choose between career and parents.

Most filial children choose career/job since there is no social safety net for the unemployed.

Most filial children also choose to hire a maid to look after their ageing parents. So there is a tax on being a filial child with the maid levy.

Take a survey of the nursing homes and old folks home in Singapore. My survey (I visited) included the most expensive nursing homes in Singapore.

I humbly concluded that the best solution for most Singaporeans is still a maid to look after our ageing parents.

Anonymous said...

Most of my friends and I don't have kids because it has never occurred to us to have one. It is a waste of time. We enjoy our lives so much, that we are puzzled by those who have kids. Why are they are choosing chore over enjoyment? Of course, it is a matter of different perspectives.

To improve the birth rate, the government has to change the mindset of the people through education, so that those who don't believe in having kids have kids. If not, it will not work, because giving incentives will only encourage those who are interested in having kids to have kids. And in most cases, they already have kids, so they won't have more.

In conclusion, the government has to start over, from the much younger generation like the primary school kids. But it getting harder, because there are many more of us now.

Anonymous said...

Hi Kian Lian,

The points you have listed are definitely some of the most important reasons for the decline in our Bithrate.

Any policy should be made simple and always target the larger segment of the population to achive any lasting results.

Maid levy or Rebates or FT are all part of the puzzle that cost our decline.

So long as the Economics hardship continue to worsen for the families whether in the form of high cost of living or Taxes, the imbalance of the natural force will be at play.

In other word, It is the whole package that needs to be examined.

Concern

Anonymous said...

The state needs to support a single income family model where one parent stayed at home to take care of the kid for the first 5 years of the kid's life. With two kid spaced two years apart, this could be as long as 7 years of the person's life.

The stay at home parent should also have options to work part time or even home business. That means support from child care or child minders.

We should be less reliant on maid to take care of our children and grandparents may not have the physical stamina to run after active kids.

jamesneo said...

Hi Mr Tan i have read a very interesting article about "Does Family Policy Affect Decisions to Become a Parent" you can type this in google and you can download it to have a look. the comprehensive article talks about the experiences of the European countries and the success and failures. it would be interesting if you can summarize some of the facts to give to oyur readers.

Anonymous said...

Working to ensure Country's Economy grows annually overrides the need to keep Singaporean happy. GDP growth will yield happy citizens as well as ministers' pay.

If priority to ensure Singaporean interest is look after and secrificing GDP growth, the outcome is that hungry, jobless Singaporeans will not vote for PAP.

So the balance is keep economy growing, keep fat minister salary coming while do some wanyang to the keep the "king of complaints Sinaporean" at bay. Very important is to give out goodies near election and the goon-do Singaporean will vote PAP in. This is the unwritten rule to win election in Sgp.

The Govt while being the best paid in the World, always ask the heartlander to work harder and harder while taking less. For themselves, when they want to increase their own salary, the reasons like long time no increase or spectacular GDP growth thus Ministers are responsible.
Even with lots of complaints from the ground, they then go ahead and implement the increase.

When it comes to crisis, it is always we are not responsible. When huge losses happened from GLC or Town councils, no one is responsible.

Speakout said...

Having a children was easy in the past when only 1 breadwinner was required. Like you said there was job security. The wife is full-time at home. And what better way to spend it than with lots of kids!

Nowadays, its almost impossible to have only 1 person working. With the average income per person at around S$2k (not the biased medium salaries that we often hear), and a take home of S$1.8k, how many kids can we really afford after spending on housing, phones, cars, luxury, pubs, etc etc.

Our lifestyles have changed so much that it has become close to impossible to return to our halcyon days.

Economy vs Kids. The government has to take a stand. You cannot have it both ways.

The least they can do is to ban working on saturdays even for the private sector. With only sunday (if any) left for the family, and tons of expenses to pay for which person in their right mind would want a kid???

Encourage the women to study home-care or home-economics and exact a higher levy/tax on top-earning working women instead of letting them fight with the men for top jobs (this has to start with the PM's wife, who should set us a good example by being a good housewife!). I know of many single women/spinsters who are so attracted by top bucks in big corporations that they'd rather stay in their offices screaming their throats out at innocent subordinates than get themselves a reliable man to settle down and set up a family.

The root of the problem - MONEY.

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Alwin said...

When I click the post a comment button a phrase came out that say comment moderation has been enable so I wonder has freedom of speech here been contained? If so than there is no point in me having to post a comment. I fundamentally disagree with your point of view that the state should pay for the raising up of children as that would mean an increase of state expenditure.

Neo said...

I also would like to introduce new courses to Polytechnic and ITE.

1. Clean Energy
2. New Media and E-Business Management
3. Nanotechnology
4. Homeland Security
5. Organic Agriculture
6. Health Care (TCM, Social Science etc)

Abolish all the complicated courses and be self-sufficient

http://video.google.com/videoplay?docid=-1721584909067928384#

http://www.youtube.com/watch?v=bISCbOUozMk From Part 1 to 9

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