Money incentives to boost childbirth unfeasible: experts

A draft outline of the Law on Population prepared for submission to the government states couples in areas with low birthrates would be encouraged to have two children.

The government would grant couples a sum equal to the minimum wage of the particular region they live in upon having their first child, and twice that upon having the second.

The minimum wage currently ranges from VND3.07 million to VND4.42 million. Under the proposal, women in certain regions could receive up to VND8.84 million upon having their second child.

Professor Nguyen Dinh Cu, former head of the Institute of Population and Social Affairs at the National Economics University, said there are now 21 cities and provinces experiencing low birthrates and given the current population in those localities, if mothers there give birth to a second child every year, around 600,000 babies would be born, which means the state will have to spend VND5.4 trillion ($237 million) per year on the incentive.

The sum is way too big and would burden the state budget, he said.

Meanwhile, VND9 million to raise a child is way too little.

Among regions with the lowest birthrate is the southeast region, home to Ho Chi Minh City. Many couples in this region are migrant workers who have to cover different types of expenses each month, including rent, meaning the incentive would be little more than "a drop in the bucket," said Cu.

Pham Chanh Trung, head of HCMC’s Bureau of Population and Family Planning, said giving the monetary incentive to encourage childbirth is not a new method and many Asian peers with low birthrates like Singapore, South Korea, Japan and Taiwan have already applied it.

"However, many studies have shown the incentive is just one part of many combined solutions."

As for HCMC, couples are placed under lots of pressure, including having a house and a decent environment to raise a child, covering a high living cost, and keeping a job (given the highly competitive job market in the city). In most cases, women have to go to work and therefore, face more challenges in work-life balance.

The decision to have just one child for many couples comes from a reasonable cause: to ensure they will give the child the best of what they're capable of.

Therefore, Trung suggested, policymakers need to listen to the actual demand of parents and seek opinions from experts to come up with suitable solutions because it needs the support of the entire system for parents to take good care of their children.

Cu said in order for the childbirth encouragement to work, solutions need to be diversified.

It is necessary to publicly promote the participation of men in doing housework, taking care of children to ease the burden on women. These days, wives also have to go to work, earn money and as a result, have reduced economic pressure on husbands, he said.

Set to be submitted to city legislators late this year, a draft plan on the population policy for HCMC in 2021-2025 that gathers both experts and public opinions propose several solutions to encourage couples to have two children, including subsidizing or waiving hospital fees for the delivery of the second child and offering families having two children soft loans to access social housing.

Other recommendations include extending maternity leave from six months to one year for having a second child and giving the father a month off, increasing the number of days of annual paid leave from 12 for employees having kids under five, and subsidizing kindergarten fees at public facilities for families with two kids.

Vietnam is among the most rapidly aging countries in the world. It entered the aging phase in 2011 when the number of people over 60 made up 10 percent of the population. That rate climbed to 12 percent last year out of a population of 95 million and is expected to rise to 17.9 percent in 2025, and to more than 20 percent in 2038.

More women in Vietnam are choosing to marry later and not have children, with pressure of employment, housing, living, and education costs factoring in their decisions.

A decision issued last year by then-Prime Minister Nguyen Xuan Phuc encouraged people to marry before they are 30 and bear children early.

Nguyen Doan Tu, head of the General Department of Population and Family Planning under the Ministry of Health, said last year Vietnam had an average birthrate of 2.1 and the level is necessary to ensure a labor force because a lower one means the population is aging fast.

Trung said low fertility and rapid population aging create increasing pressure on the social security system for the elderly such as pensions, health insurance, social allowance and at the same time, causes a decline in the labor force, affecting the socio-economic development of the city.

On the other hand, the cost of the birth promotion policy as planned in HCMC will put pressure on the city's budget, while this budget should be invested in improving sustainable development.

However, Cu said: "In the long term, Vietnam needs to have strategies to adapt to the trend of lower birth rates to replace quantity by quality in its labor force."

Some countries have already improved their production output by using robots and Vietnam should learn from their experience so its economy would not be affected by the low birthrate, it was suggested.