Warning Bell for Developed Countries: Declining Birth Rates

There will be a shift in power unless birth rates increase in the developed world
By Lee Kuan Yew, Forbes, 25 Apr 2012

In developed countries today many women receive educations and earn salaries that are on a par with those of men. The fact that women are no longer socially or economically dependent on men has radically altered young people’s lifestyles. A woman can now choose to remain single, marrying only when a man adds value to her life or when she desires to have children within such a framework.

This is creating big changes throughout the developed world. The replacement rate--the reproduction rate that keeps a population stable--for developed countries is 2.1, yet nearly half the world’s population has birth rates lower than that. The U.S. has a total fertility rate (TFR) of 2.0--nearly the replacement rate--with Hispanic immigrants leading in birth rates. The U.S. is aging but not as fast as many other countries. A 2010 census showed that 31.4 million Americans live alone--27% of all households (equal to the percentage of childless couples). Living alone allows people to pursue individual freedom, exert personal control and go through self-realization, but these people have fewer children.

Western European countries have low fertility rates, below the replacement rate of 2.1. Germany: 1.4 (its total population is 81.9 million, of which 8.2% are foreigners). Holland: 1.8 (16.5 million, of which 4.4% are foreigners). Belgium: 1.8 (10.8 million, of which 9.8% are foreigners). Spain: 1.4 (46.1 million, of which 12.4% are foreigners). Italy: 1.4 (60.2 million, of which 7.1% are foreigners), the Pope’s views notwithstanding. Sweden, which provides deep support for parents, has a high TFR of 1.9 (9.4 million, of which 6.4% are foreigners), but that’s still below the replacement rate. Ireland and the U.K. also have high TFRs, at 2.1 and 1.9, respectively, but these rates are derived from non-European immigrant parents.

During the 21st century the U.S. could become the slowly aging leader of a rapidly aging world.

Singapore’s experience is no different from that of these countries. Our birth rates have been steadily declining. The fertility rate of the Chinese segment of our population is the lowest, 1.08 (2011), with the rate for Indians 1.09 and for Malays 1.64. In other words, the size of each successive generation of Chinese Singaporeans will halve in the next 18 to 20 years.

To have babies is, of course, a personal decision, but for a nation’s population that decision carries considerable consequences. The education of our women and their ability to be high-income earners have altered social behavior and led to marriages later in life. But when women put off having children until their mid-30s, they have fewer children.

In Singapore in 2011 seven working adults supported one retiree. By 2030 2.3 working adults will have to support one retiree. We have more than 340,000 people over the age of 65, with 2.36 million people between the ages of 15 and 64. By 2030 we will have 900,000 over the age of 65, with only 2.04 million working adults between the ages of 15 and 64.

Many women are deciding to either put off getting married or remain single. It’s a grave problem that finds 44.2% of Singaporean men and 31.0% of women between the ages of 30 and 34 single. Marriage rates in 2011 fell across all the below-30 age groups, with the greatest drop in the 25- to 29-year-old group. Hence, the number of children born has decreased drastically.

When I first became prime minister in 1959, more than 62,000 babies were born that year--and Singapore’s population was half that of today’s. Low fertility and an aging population are two of our greatest concerns. In the future we will have to depend on immigrants to make up our numbers, for without them Singapore will face the prospect of a shrinking workforce and a stagnant economy. Fewer young ­people means fewer new cars, stereos, computers, iPhones, iPads and clothes will be sold, not to mention that there will be fewer customers to partake in fine dining--and all the ancillary businesses.

To encourage marriage and parenthood, Singapore’s government has ­instituted a wide array of measures: improved accessibility to quality child care, leave entitlements for new mothers and parents of young children, and financial incentives to help defray the costs of raising children. We created a special account for each child in which parents’ savings have been matched, dollar for dollar, by the government, with caps ranging from $6,000 to $18,000, depending on the birth order of the child. This was done to encourage parents to have three or four--or more--children.

This article first appeared in the May 7 issue of Forbes Asia magazine.