Concerted approach may boost baby numbers

The mix of policy enhancements and concrete incentives represent a concerted approach to trying to nudge more couples into parenthood.
PHOTO: The Straits Times

While Sunday's National Day Rally speech by Prime Minister Lee Hsien Loong aimed to stir a nation on its Jubilee year of Independence, it was also noteworthy for the slew of announcements that enhanced pro-family and pro-natalist policies.

Taken together, these changes are quite significant, as they speak of the country's push to improve Singapore's constant low fertility levels.

The changes announced represent a concerted approach to tackling a longstanding issue. The various initiatives thus should be viewed together as a complete whole. Each has a part to play in encouraging young couples who may be considering getting married, as well as married couples who may be considering having their first child or another child.

First, it speaks to couples considering marriage that they are not alone when making this very important decision.

Many couples at this stage of their lives are concerned with wanting to own their first home. The adjustments made to give more generous Central Provident Fund housing grants as well as the raising of the income ceiling (from $10,000 to $12,000) to own Housing Board flats will help more young couples buy and own a Housing Board flat - their first home.

Second, it signals to these couples, as well as those considering having another child, that many of the basic needs - with regard to having children - have been acknowledged and reflected in the enhanced measures announced.

For example, they will get a higher Baby Bonus of $2,000 per baby, raising the bonus to $8,000 and $10,000 per baby, depending on the birth order of the infant. The Baby Bonus is also extended to cover all children, and does not stop at the fourth baby of a married couple. Babies' healthcare needs are also catered for, with the MediShield Grant for Newborns sufficient to help cover MediShield Life premiums up to the age of 21.

Reflecting the importance of the family as a pillar of support, a Proximity Housing Grant of $20,000 is being offered to those who buy HDB resale flats with or near their parents. For young couples with children this is a definite plus, knowing that their parents are close by and can help them in times of need.

But how effective will these measures be?

It is still early days yet as the enhancements have just been announced. However, in view of past marriage and parenthood incentives rolled out over the years, it would not be overly optimistic to speculate that there would be positive effects that would bear fruit in the foreseeable future.

This is because the enhancements made this time are largely focused on existing measures, and if the increase in marriages reported earlier this year by the Department of Statistics and the increasing number of newborns reported by the National Population and Talent Division are anything to go by, it suggests that the enhancements will be effective in the long term.

Last year, there were 24,000 marriages involving at least one citizen, the highest number since 1997. Singaporeans had more babies: 33,000, up from 31,000 in 2013. This raised the country's total fertility rate to 1.25, from 1.19 in 2013.

However, as with all policy initiatives rolled out, patience is key to its success. What is more important to point out from the basket of initiatives are two specific enhancements that may likely contribute to nudging fertility rates up in the future.

First, the enhanced Baby Bonus is now not limited to just the first four children but extends to all subsequent children born. This sends a strong signal that every baby is precious.

The other is the additional week of paternity leave that fathers will enjoy with the birth of their child.

This signals not only to fathers the important role they play with bringing up the child; but more importantly, it also signals to employers that they need also to reconsider any traditional views they may have with regard to parenthood and the need to take into account the fact that it encompasses both fathers and mothers.

These are small but significant steps in the right direction. In fact, these two initiatives are, to a certain extent, in line with recent research published in Population And Development Review by Nikolai Botev where he discussed how policies that cater specifically to striking a balance between work life and family life, as well as the need to move away from parity-targeted incentives, may motivate couples to consider favourably having children.

The mix of symbolic enhancements to policies, and the use of concrete, monetary incentives can be viewed as a package, representing a concerted approach to trying to nudge more couples into considering parenthood.

If recent observations with regard to marriage numbers and birth numbers reported are anything to go by, the outlook is positive.

Dr Kang Soon-Hock is the Head of Social Science Core at School of Arts and Social Sciences, SIM University.

This article was first published on August 28, 2015.
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