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In this Explainer, find out...
Why is it difficult to raise Singapore’s birth rate?
What policies have the Government put in place to increase Singapore’s birth rate?
How do Singapore’s pro-natal policies compare with those of other countries?
Introduction
Singapore has one of the lowest birth rates in the world. The country’s fertility rate reached a new trough of 0.97 in 2023, significantly lower than the mean for OECD countries.¹ This is well below the replacement fertility rate of 2.1, the fertility rate at which a population completely replaces itself from one generation to the next.²
This has raised alarm bells in Singapore. An ageing population will not only lead to a fall in the size and dynamism of our workforce,³ but also a fall in taxes collected to support our elderly population.⁴ These could hurt the standard of living of future generations and dampen Singapore’s attractiveness as a business hub.
In this Policy Explainer, we explore reasons that may explain why Singapore’s birth rate is falling and how the Government has attempted to alleviate these concerns to better understand what shaped the government’s policies. Then, we compare Singapore’s efforts to those of its Asian and European counterparts to find out what lessons we may draw from them.
Reasons for a Declining Birth Rate
Singapore’s falling birth rate has been caused by numerous issues stemming from socio-economic and technological changes in her society.
Rising Cost of Living
With inflation rising by over 6 per cent in 2022, and by another 4 per cent in 2023, Singaporeans have been feeling the pinch of rising prices.⁵ Price hikes in food, transport and accommodation mean that raising a child has become more expensive. As of 2021, the estimated cost of raising a child from birth to adulthood stands at around S$350,000, assuming one chooses the cheapest options for public hospital delivery and receives Government subsidises to study at local universities.⁶
In fact, in a 2023 CNA-YouGov survey, 52 per cent of respondents aged 35 and below cited affordability as a reason for why they decided not to have more children or any children at all. The survey highlighted the key role financial barriers play in preventing couples from having children.⁷
Working Couples
The cost of raising a child also compounds when parents consider opportunity costs to their career and lifestyle. For example, the need to spend time with their children after work forces couples to forgo limited time for rest and recreation. The need to support their children’s educational journey in an increasingly stressful educational environment also adds stress to parents’ lives.⁸
Additionally, the highly competitive work culture, which glorifies career achievements while deriding a lack of ambition, has resulted in a career-first mentality. This has led to a larger proportion of couples who are unwilling to sacrifice their careers to bear children.⁹
Finally, this is exacerbated by long working hours – Singapore ranked 2nd highest in average weekly working hours in 2019 – and cost of living concerns that pressure both parents into focusing on their careers.¹⁰ All these create a pressurising work environment that discourages couples from raising children.
Falling Fertility as Couples Age
The career-first mentality borne by Singaporeans has also led to couples choosing to have children only after their careers have taken off. This is evinced by how the median age of childbearing mothers has risen. The median age of first-time mothers increased from 30.1 years in 2012 to 31.3 years in 2022.¹¹
Figure 1: Age-specific Childbearing Rates¹²
Furthermore, from 2012 to 2022, the number of women aged 20 to 34 who have children has fallen, whereas the number of women aged 35 to 44 who have children has remained largely constant (see Figure 1). This shows that couples are now opting to have children later, in turn leading to an overall decline in children born.
While this might seem innocuous at first glance, age has an impact on a woman’s fertility. The older a woman gets, the less likely she is to get pregnant. They are also more likely to face pregnancy complications like miscarriages.¹³ This means that women deciding to have children later may not be able to conceive when they are willing to, thus inevitably contributing to falling birth rates.
Despite advances in reproductive technologies, studies have shown that these are insufficient to fully compensate for the fall in women’s fertility after 30, highlighting that this risk cannot simply be mitigated by technological advancements.¹⁴
Pro-Natalist Policies
Given these issues, the Government has implemented a slew of pro-natalist policies — policies that seek to encourage couples to have more children — to combat the slowing birth rate.
Pro-natalist policies can be grouped into two categories: financial support and work-family initiatives.¹⁵
Financial Support
Today, the Government provides a range of financial support, including payments, subsidies and tax relief, These measures seek to help parents defray the costs of raising children while offering some financial assurance to potential parents in the hopes of encouraging parenthood.
First, the Baby Bonus Scheme, introduced in 2001, is a key policy offering financial support and encouraging couples to have children. The Baby Bonus Scheme contains two components, the Baby Bonus Cash Gift (BBCG) and a Child Development Account (CDA).
The BBCG is intended to alleviate costs as parents support their child’s early years. Payouts are disbursed every six months until the child reaches six-and-a-half years of age. Furthermore, as of 2023, the total payout has been raised to S$11,000 for the first and second children (see Figure 2).¹⁶
Figure 2: Comparison of pre- and post-Budget 2023 BBCG sums¹⁷
Meanwhile, the CDA functions as a co-savings account between parents and the Government for each child. It offers the CDA First Step Grant, which is automatically deposited when the CDA is opened. Additionally, savings deposited in the CDA receive dollar-for-dollar matching from the Government, up to the co-matching cap.¹⁸ The CDA is valid till a child turns 12 years old, and can be used to pay for expenses like childcare fees and assistive technology devices.¹⁹
Second, to support children’s healthcare expenses, the Government also opens a Central Provident Fund (CPF) Medisave account for each newborn citizen to enjoy a Medisave Grant of $4,000. The grant supports a child’s healthcare expenses, including recommended vaccinations and outpatient treatment.²⁰
Third, a range of tax relief and rebates are also offered to parents who have children. These include the Parenthood Tax Rebate, Qualifying Child Relief, Handicapped Child Relief and Working Mother’s Child Relief (WMCR).²¹ Besides defraying the costs of raising a child, some measures also aim to encourage working mothers to have children and remain in the workforce. For example, the WMCR provides a fixed dollar tax relief of up to S$12,000 for working mothers.²²
Fourth, recognising the importance of pre-school education, the Government has also introduced tiered subsidies for licensed childcare centres.²³ These preschool subsidies were further increased for lower-income families in Budget 2024. During Budget 2024, reductions in monthly full-day childcare fee caps in Government-supported preschools were also announced.²⁴
Work-Family Initiatives
Besides offering support for raising children, the Government is also promoting a set of work-family initiatives to help parents balance their work and family commitments. These include parental leave and flexible work arrangements.
One prominent work-family initiative that Singapore has pursued is parental leave, which offers mothers and fathers time away from work to take care of newborn children.
Singapore’s parental leave scheme has evolved over the years. Originally, parental leave only consisted of paid maternity leave for mothers of newborn children. Incremental changes were made, with paid maternity leave being raised from eight to 12 weeks in 2004 and further to 16 weeks in 2008.²⁵
In recent years, the scope of parental leave has expanded significantly. In 2013, paid adoption leave of four weeks was mandated for mothers of newly adopted children.²⁶ Affirming that childcare is a duty for both parents, 2013 also witnessed the “Shared Parental Leave” scheme that introduced one week of paid paternity leave. This scheme has been gradually enhanced to make paternal involvement the norm. For one, Budget 2023 announced a doubling of government-paid paternity leave to 4 weeks.²⁷
Altogether, such measures not only enable mothers to recover and bond with newborns but also encourage the sharing of parental responsibility. This relieves the childbearing burden on mothers and enhances support for new parents, thus encouraging parenthood.
Another work-family initiative Singapore is pursuing is flexible work arrangements, which gained significant attention during the COVID-19 pandemic. In 2023, a workgroup consisting of Government and non-government stakeholders was established to develop guidelines on Flexi-Work Arrangements (FWAs). The guidelines are being developed with the aim of harmonising work and family commitments. They are expected to be published later in 2024.²⁸
These work-family initiatives promote the idea that career and child-rearing need not be mutually exclusive. In doing so, they shape family-friendly norms and assure potential parents that support will be given to help them balance work and family commitments, thus reducing deterrents to parenthood.
Reception of Pro-Natalist Policies in Singapore
Singapore has adopted a range of monetary and non-monetary measures to encourage parenthood. Considering the challenges Singaporeans face, it is arguable that without these policies, the birth rate may be even lower.
Regardless, it is important to acknowledge their shortcomings. From the 2021 Marriage and Parenthood Survey, about half of the respondents highlighted that raising children in Singapore is stressful.²⁹
Pro-Natalist Policies Abroad and Their Relevance to Singapore
Given that maintaining birth rates is key for any nation, a plethora of policies to encourage parenthood have been introduced outside of Singapore. Thus, it may be helpful to review those policies and explore how Singapore can draw lessons from abroad.
Financial Support
Several countries offer generous financial support to encourage parenthood. In Germany, under the Kindergeld scheme, parents receive €250 per month per child.³⁰ Further north in Finland, price caps have been implemented to tackle the high costs of childcare.³¹ Moreover, low-income families are entitled to enjoy childcare services for free.³² Beyond grants, tax deductions have also been implemented in some countries. France’s Code de la Famille provides financial incentives through cash incentives to stay-at-home mothers, and parents get full tax benefits until their youngest child reaches 18.³³ In neighbouring Germany, families can receive up to €4000 in tax deductions for childcare costs.³⁴
These benefits are undeniably appealing, but they must be paid for. It should be noted that personal income taxes in these countries are high. For instance, Finland’s average income tax is 20 per cent.³⁵ Singaporeans will have to pay higher taxes in order to finance such benefit schemes. This, however, would exacerbate the cost of living woes for Singaporeans. It could create hesitation to start a family and have more children – if any at all.
Work-Family Initiatives
While the financial benefits offered by many countries aim to directly address the increased cost of living associated with raising a child, they are not enough to promote a family-starting culture. Hence, many of these countries also use social policies to promote a conducive childbearing culture.
One of these policies is the provision of extensive parental leave for both mothers and fathers. Finland’s paid parental leave system, for one, encourages fathers to be more involved in a fair distribution of household work. Both parents can divide the 320 days of paid parental leave between themselves. Furthermore, fathers can take up to 54 working days of paternity leave, of which they can be at home with mothers for up to 18 days. The Finnish Social Insurance Institution pays for these entitlements.³⁶
Germany also aims to foster parenthood through their generous parental leave policy. Parents can choose from both the Basiselterngeld and the ElterngeldPlus, which are different compensation schemes for parental leave and shorter working hours.³⁷
Another common policy is to boost the availability and accessibility of childminding and childcare services. Since 2013, parents in Germany have been accorded legal rights to enrol their children aged one to three in a daycare centre.³⁸ This helps to ensure kids will be adequately cared for once parents start going back to work.
Beyond that, governments can also nudge companies into creating family-friendly workplace norms. For instance, the South Korean government provides certifications for businesses and organisations with family-friendly policies. They are evaluated for their family-friendly systems of childbirth, childcare support, and flexible work arrangements.³⁹ Certified companies attract South Koreans who are seeking a job but hope to allocate time to their families. This in turn increases the viability of childbearing. It also encourages uncertified companies to review and modify company policies to attract talent and labour.
Given that the opportunity costs of parenthood are a significant deterrent in Singapore, Singapore may wish to emulate the aforementioned countries, especially when it comes to generous parental leave policies.
However, beyond parental leave policies, it is key to also nurture more family-friendly attitudes in our workplaces, especially when it comes to supporting fathers in caring for newborn children. In Singapore, the take-up rate of paternity leave has increased from 25 per cent in 2013 to 53 per cent in 2021, but utilising paternity leave is still not yet the norm.⁴⁰ The Ministry of Social and Family Development has found the fear of poor workplace support and damaged prospects as a key reason for this.⁴¹ This suggests that shaping family-friendly workplace norms is crucial to encourage childbearing in Singapore. Therefore, Singapore could consider drawing inspiration from other countries and nudge its private sector to shape family-friendly norms.
Conclusion
For many countries, a sustainable birth rate is a necessity. From an economic lens, it is needed to sustain the workforce population. From a social lens, having a sustainable birth rate avoids a burgeoning ageing population and the creation of an overburdened sandwiched generation.
To achieve this, countries have adopted policies like grants and tax reductions to promote childbearing, as well as increases in compensated parental leaves. They have addressed significant concerns such as the high costs of raising a child and challenges in balancing work and parenting. However, as evidenced by declining or consistently low birth rates locally and globally, the effectiveness of such extensive policies, both in Singapore and abroad is limited.⁴²
Ultimately, further studying this prescient problem through both economic and socio-cultural lens is necessary to develop more robust, effective and humane solutions.
This Policy Explainer was written by members of MAJU. MAJU is an independent, youth-led organisation that focuses on engaging Singaporean youths in a long-term research process to guide them in jointly formulating policy ideas of their own.
By sharing our unique youth perspectives, MAJU hopes to contribute to the policymaking discourse and future of Singapore.
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