Taiwan's sinking birth rate threatens productivity

Taiwan's sinking birth rate threatens productivity CLAIRE LIN JOYCE CHEN

Issue • Birthrate in Taiwan is among the lowest in the world • Taiwan is scrambling to raise its birthrate before the sinking number of newborns threatens productivity for its export-driven $390 billion economy • Taiwan announced last month that its fertility rate had fallen below one baby per woman, worrying the government about its future supply of manpower and brain power. Taiwan’s rate of 0.9 is now the world’s lowest, but other developed Asian economies are close behind. • Taiwan fears it will lack the manpower or brainpower in 10 to 15 years to keep up with industrialized Asian peers and the blooming economies of some Southeast Asian countries.

Statistics • A crude birth rate of 8.3 newborns per 1,000 people last year puts Taiwan above only Germany, Hong Kong, Italy and Japan. In comparison, Vietnam has a birth rate of 17.73 and Malaysia of 22.24. • Japan, despite a rate of 7.64, has soldiered on with automation and encouraging elders, women and foreigners to work. Asian peer Singapore has used baby bonuses for nine years to raise its rate, which was estimated at 8.82 in 2009.

"Without a young generation, there's no labor force, then you lose productivity," said Hu Chung-ying, deputy minister of the Taiwan cabinet's Council for Economic Planning and Development. "It's a very worrisome issue.” • Taiwan's productivity would slide as retirees exceed new workers on the island of 23 million people unless citizens return en masse from abroad or more elderly seek jobs, economists say. • That would cripple Taiwan's hard-fought efforts to compete with Hong Kong, Singapore and South Korea, all known for industrialization and fast growth from the 1960s to the 1990s.

In general… • But the drop is also part of a broader regional trend. • A shift away from traditional rural lifestyles has allowed women easier access to university education and the time-consuming jobs that follow. Pricey childcare and later education in already-expensive Asian cities strain family budgets. • Chinese people have traditionally preferred large families, but some say that, in Taiwan, Hong Kong and Singapore, career advancement has overtaken that goal

Reason 1 • Taiwanese are shunning births in favor their careers, which often delays marriage or scraps the idea altogether, and to save child-rearing expenses that include babysitters and education from kindergarten to university. • "Women have changed. Women have expectations of a career," said Linda Arrigo, an American-born Taipei university instructor in Taipei with a sociology background. "Women can't handle a career with two children plus."

Balancing work and family life has proven to be a challenge for both men and women in Taiwan. According to the Swiss-based International Institute of Management Development, Taiwanese work some of the longest hours in the world, averaging nearly 44 hours a week, and Taiwan's women are very career-oriented.

Ｆacts • Two-thirds of working women in Taiwan are university-educated, and fewer of them are jumping into tying the knot early. "I'm not pursuing marriage," says Hsu Yu-hua, a 30-something accountant in Taipei. "Not with today's divorce rate [38% in Taiwan]. I'm financially independent, and it's more convenient to be single.” • Only a third of Taiwan's women are married by age 30, in contrast to 20 years ago, when the average age for marriage for women was 26. Many more men have also been marrying women from other Asian countries like China and Vietnam, both countries where women are statistically inclined to have more children. China, even with the government's one-child policy, still has a birthrate of 1.6, compared with Taiwan's 1.0 (Vietnam's is 2.1). Today, 1 in 8 babies in Taiwan is born to a non-Taiwanese mother.

Reason 2 • Housing prices are rising fast in parts of Taiwan while wages are stagnant, adding financial pressure to middle-class couples • Case:  Sunny Yen, 42, is a typical case. She and her husband are middle-class white-collar workers in Taipei. They decided against a second child after realizing that their first would cost T$20 million ($630,000) to raise from diapers through college degree

Solution • Singapore has also offered baby bonuses, including cash, since 2001 and business is booming in its fertility clinics • Japan has sought to safeguard its economy with more automation and by encouraging elders, women and foreigners to work • Taiwan is leaning toward subsidies and tax breaks to ease costs of education and child care • “Cities and counties in Taiwan will come up with subsidy packages for families with newborns, while the parliament considers a tax break plan”

Solution continue… • The interior ministry expects its 2010 budget to cover the so far unknown cost of encouraging child births • If it needed more, Taiwan could set up a special budget or reallocate resources • In the longer term, Taiwan may allow more migrant labor, supplementing a foreign workforce of about 300,000, mostly from Southeast Asia

Reference • http://www.time.com/time/world/article/0,8599,1945937,00.html

Taiwan's sinking birth rate threatens productivity