Asian powers’ multimillion-dollar measures to combat low birth rates (and doubts about their effectiveness)

The decline in the birth rate is a major concern in some of the largest Asian economies and their governments are spending hundreds of billions of dollars to reverse this trend.

Japan introduced its first policy to encourage couples to have more children in the 1990s. South Korea followed suit in the 2000s, and Singapore’s first fertility law dates back to 1987.

China, which saw its population decline for the first time in 60 years, recently joined this club.

It is difficult to quantify the exact cost of these regulations, although South Korean President Yoon Suk-yeol said his country more than $200 billion in the past 16 years in an effort to increase their population.

Last year, South Korea broke its own record for the world’s lowest fertility rate, with an average number of expected babies of 0.78 per woman.

In Japan, where a number occurred record of less than 800,000 births last yearPrime Minister Fumio Kishida has pledged to double the budget for child-related policies from $74.7 billion, just over 2% of the country’s gross domestic product.

In the world there are more countries that are trying to lower their birth rates, but the number of countries seeking to increase their fertility has more than tripled since 1976according to the latest United Nations report.

Why do these countries want to increase their population?

In simple terms, a larger population that can work and produce more goods and services leads to higher economic growth. A large population means higher costs for governments, but can also lead to more tax benefits.

Many Asian countries are aging rapidly. Japan leads this trend with almost 30% of the population over 65 years old. Other countries follow closely behind.

Compare India, which has just overtaken China as the world’s most populous nation. More than a quarter of the population is between 10 and 20 years old, which gives the economy enormous growth potential.

And as soon as the share of the working population decreases, the costs and burden of care for the unemployed increase.

“Negative population growth has consequences for the economy and coupled with an aging population, they will not be able to afford support for the elderly,” said Xiujian Peng of Victoria University in Australia.

Most of the measures in the region to increase the birth rate were similar: payments to new parents, subsidies for free education, more childcare, tax breaks and longer maternity and paternity leave.

But do these measures work?

This is evident from data from recent decades in Japan, South Korea and Singapore attempts to increase their population have had little effect.

The Japanese Ministry of Finance has published a study that qualifies this policy as failed.

It is a vision shared by the United Nations.

“We know from history that the kind of policy we call population engineering, when it tries to encourage women to have more babies, just doesn’t work,” Alanna Armitage of the United Nations Population Fund told the BBC.

“We need to understand the underlying determinants of why women are not having children, and that is often due to the obstacles women face in reconciling their work and family lives,” adds Armitage.

In Scandinavian countries, however, fertility policies have worked better than in AsiaPeng said.

“The main reason is that they have a good social security system and the cost of raising children is cheaper. Their gender equality is also much more balanced than in Asian countries.”

The latter is included in the World Economic Forum’s report on the global gender gap.

There are also big questions about how to finance these costly measures, especially in Japan, the most indebted economy in the developed world.

In Japan, several options are being considered, such as selling government bonds, increasing your debt, increasing your sales tax, or increasing your social security contributions.

The first option places a financial burden on future generations, while the other two would hit workers hardest and in turn convince them to have fewer children.

But so says Antonio Fatás, professor of economics at the European Institute of Business Administration regardless of whether this policy works, they need to invest in it.

“Fertility rates have not increased, but what if there was less support? Maybe they would be even lower,” says Fatás.

Governments are also investing in other areas to prepare their economies for shrinking populations.

“China has invested in technologies and innovations to balance its shrinking workforce and mitigate the negative impact of its shrinking population,” explained Peng.

And while it remains unpopular in countries like Japan and South Korea, lawmakers are discussing changes to their immigration rules to attract young foreign workers.

“The fertility rate is falling worldwide and there will be a race to attract young people to work in your country,” added Peng.

As for whether or not the money is well invested in fertility policies, it seems these governments have no other alternative.