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Taiwan's Shrinking Population

The 1.5 Million Baby Challenge


The 1.5 Million Baby Challenge


Taiwan has the lowest birthrate in the world, and an aging population. At least 1.5 million births are needed in the coming five years to boost the birthrate. Who is going to have these 1.5 million babies? And who can afford them?



The 1.5 Million Baby Challenge

By Fuyuan Hsiao
From CommonWealth Magazine (vol. 444 )

Will this turn out to be the Taiwanese version of "2012"?

A domino effect is under way. Taipei City is the first tile to topple. Over the past six years the number of child daycare centers in the capital has dwindled from around 1,000 to just 400, because there are markedly fewer preschool-age children.

As the domino effect is felt, elementary schools and junior high schools across the island will have to close more than 1,000 classes over the coming three years for lack of students. As a result, the survival of shops, cram schools and after-school care businesses in the neighborhoods of these schools will also be at risk. In four years Taiwan's population will start to shrink. Over the next decade one third of Taiwan's universities will have to close their doors, as right now the island's university system has an acceptance rate approaching 100 percent.

Subsequently, supply will exceed demand in the housing market, domestic consumption will become anemic and most public facilities will stand idle. Eventually, every working person in Taiwan will have to support 1.5 retired elderly people. Half of the people that you meet in the streets will be over 57.

Kuanjeng Chen, an authority on population issues and professor at the Department of Health Care Management at Chang Gung University, notes that he had already predicted a decline in Taiwan's birthrate 30 years ago. But as he anxiously smokes, Chen admits that he underestimated the severity of this downward trend. "The problem is that I didn't expect the decline to be so fast, that our birthrate could become the lowest in the world. That truly makes me very nervous." Chen, who already has grandchildren, did not expect population studies to make a 180-degree turnaround during his lifetime. While policies in the past focused on family planning and birth control, the top priority now is encouraging people to simply have children. (Table 2)

Chen makes a simple calculation to illustrate how serious the situation already is. Taiwanese women presently give birth to an average 1.02 children during their lives, far below the minimum 2.1 children required to ensure natural population replacement. (Table 1)

If Taiwan's birthrate is to rise to the OECD average of 1.6 children by 2015 as the Population White Book by the Ministry of the Interior envisages, then 100,000 more babies need to be born annually. Overall, 1.5 million babies would have to be born in the coming five years to offset the rapid aging of the population.

Who is to Bear 1.5 Million Babies?

One and a half million more babies would rejuvenate and invigorate Taiwan's population.

Yet the big question is: Where are these babies supposed to come from?

Clearly, the Ministry of the Interior's solicitation campaign for an inspiring pro-birth slogan, including a prize offering of NT$1 million, is not the ultimate answer. Nor is the Economic Cooperation Framework Agreement that Taiwan is currently negotiating with China.

The answer lies with Taiwan's women.

Improving the situation of women is not only the key to boosting the meager birthrate, but also to solving other social problems that have been nagging Taiwan for a long time, such as stagnating wages and poverty. Many of Taiwan's fundamental issues and core problems are rooted in the fact that the large number of working women find it difficult to juggle family and work and that they have to put up with meager pay.

Pressure on Women Increasing

Lin Thung-hong, assistant research fellow at the Institute of Sociology at Academia Sinica, notes that women exhaust themselves struggling on several fronts – their jobs, household work and family duties. Aware of this double burden, many women do not view childbearing as an attractive option.

Female participation in the labor force has steadily increased in Taiwan. As a result, women can exploit their rising influence to push for social change.

Statistics by the Council of Labor Affairs (CLA) show that the female work force increased by 10 percent over the past three decades, while the male work force steadily declined during the same period to reach a historic low of 66.4 percent last year. (Table 3)

Women are on the way to becoming the dominant work force, a trend that is getting more pronounced day by day. In the United States, for instance, economists predict that – partly due to the economic crisis which cost many men their jobs – working women will outnumber working men within a few months, comprising the majority of the work force for the first time in American history.

CLA minister Wang Ju-hsuan, nonetheless, notes some striking differences between the labor markets in the West and Taiwan. Pointing to statistical data, Wang notes that female participation in the work force shows an M-shaped pattern in Europe and North America, meaning that women quit their jobs when getting married or having children, but that they also stand a good chance of returning to the workplace once their kids are older. In contrast, female employment in Taiwan follows a reverse V-shaped pattern, because once women have quit their careers to focus on childrearing or caregiving they find it nearly impossible to resume their careers.

Over the past year, the CLA has held professional training courses for women who want to return to work, to improve their chances in the job market.

Ten years ago, Su Chien-ling, chairperson of the women's rights group Awakening Foundation, warned that women will go on a birth strike unless their burden from doing the bulk of household chores and raising the kids is reduced.

Policy in European and North American countries has focused on creating a work environment that allows women to have both a career and a family. From the beginning of the 1980s, these efforts seemed to yield results. Female participation in the work force began to rise in Europe and the birthrate climbed too.

But in Taiwan the birthrate declined as more women joined the work force. "The changes were too fast and policy too slow," Su Chien-ling concludes.

If Taiwan had only to deal with a declining birthrate, the situation would still be manageable. But compounding the difficulty, the birthrate is declining just as the population is aging rapidly. In other words, fewer young people must support more senior citizens. The low birthrate and rapid population aging are like two sharp knives held to Taiwan's throat – they are the island's most pressing socioeconomic problems and a serious threat to its long-term development.

Women Most Affected by Poverty

Hsieh Ai-ling, director of the Department of Household Registration at the Ministry of the Interior, explains that currently the dependency ratio is extremely low, with 100 working persons supporting 37 non-working elderly people. But the latest population projection by the cabinet's Council for Economic Planning and Development (CEPD) shows that in 45 years, every 100 working persons will have to support 150 senior citizens. In other words, those who are under 20 or not yet born today will have to spend the lion's share of their income on supporting the nonworking elderly.

Some other realities that policymakers need to face squarely are the difficulties of childrearing, low female incomes and a high poverty ratio among women.

Salary incomes in Taiwan have stagnated for a decade now, which is partly due to the overall worsening business environment, but also to the fact that a large number of women have joined the work force.

A survey by the Directorate-General of Budget, Accounting and Statistics (DGBAS) found that female employment is concentrated in low-income jobs. More than 60 percent of employed women earn less than NT$30,000 per month. CLA minister Wang Ju-hsuan elaborates further that the regular salaries or wages of women have already "risen" to 80 percent of what their male counterparts make. But since real salaries have shrunk and the financial crisis is putting further downward pressure on wages, women feel more exploited than ever.

In 1978 American social welfare expert Diana Pearce observed that 70 percent of the poverty population were women. At the same time the number of households headed by women was on the increase. And in general, households headed by a female were poorer than households headed by a male.

A similar situation prevails in Taiwan today. DGBAS family statistics show that almost six percent of the island's 700,000 single-parent families are living in poverty. Women are the sole breadwinner in sixty percent of the families living below the poverty line.

Lin Thung-hong of the Academia Sinica has observed after many years of poverty research that social mobility in Taiwan has come to a near standstill, and thus poverty tends to become hereditary. At the same time the two major avenues for upward mobility – founding a business and higher education – are also getting narrower. The number of startups has halved during the past ten years, while higher education has become so common that even university graduates are facing difficulties finding jobs.

More women than men live below the poverty line in Taiwan. If women want to lift themselves out of poverty, they need to get a better education. But again, with the burden of childrearing and family care resting on their shoulders, these women face heavy physical and mental pressure.

Low income, poverty, and a low birthrate form a vicious circle that constrains many women who don't have a choice in the first place.

But even women who have a choice feel that having children is "too expensive." In an opinion poll by the online edition of China Times taken early this year, 68 percent of those young Taiwanese women who said they did not want to have children indicated their reason was because the financial burden of childrearing is too high.

Women Key to Solving Social Problems

Long gone are the days when all it took to raise one more child was another pair of chopsticks, laments Wu Ting-feng, an assistant professor at the Research Center for Humanities and Social Sciences at National Cheng Kung University. In a highly competitive society, expenses for a child's education can reach staggering dimensions.

Himself the father of two, Wu lives with his family in Taichung. A nanny looks after the younger child for NT$16,000 per month. The older child attends a private kindergarten, which costs NT$8,000 per month on top of a NT$15,000 registration fee per term. If daily necessities such as food and clothing are added in, the family spends almost NT$40,000 on the kids alone.

"Children are a perpetual money pit. You need to invest in them at every stage," says Wu. "They're as expensive as building a DRAM fab."

Former Economics Minister Ho Mei-yueh agrees that if the birthrate and incomes are to rise, the solution has to start with women. Ho argues that many rags-to-riches entrepreneurs owe their success to support from women, usually mothers. "Women are like the cue ball in billiards. If you want to untangle all the knots of society, you need to begin with women," states Ho.

Wanting Children and Being Able to Afford Them

Clearly the low birthrate affects Taiwan's economy, state finances and competitiveness. And it seems equally clear that the situation of women must be improved to make childbirth a more attractive choice. Which policies could entice Taiwan's women to give birth to 1.5 million babies in the next five years?

First, we need a marked increase in public daycare facilities. The number of public childcare centers stands at only one tenth of private facilities, but private centers charge fees that are more than three times higher. Due to the lack of available spaces, many working women cannot get their children into public daycare centers, but they also cannot afford private ones. Moreover, CLA spot inspections in May last year found that two thirds of the inspected childcare centers did not meet labor law requirements. Since salaries are low, the turnover rate of staff is also high.

Experts once suggested that elementary schools which cannot enroll enough students to fill all classes could remodel idle classrooms into childcare centers. But private daycare businesses strongly object to an expansion of public childcare facilities. Yet the government should not bow to such pressure, but establish friendly and affordable daycare centers.

Second, universities could establish family housing on campus. Female fertility begins to rise from age 15, but declines after the age of 30. During their peak period of fertility, most women are still studying in college or university. Population studies expert Chen Yu-hua, assistant professor at the Department of Agricultural Extension at National Taiwan University, suggests that Taiwan's universities follow the examples of overseas universities and set up campus family housing to make it easier for women to combine study and family life.

Third, government expenditure on early childhood education must be dramatically increased, if public assurances that a higher birthrate is top priority are to be credible. While the Ministry of Education spends NT$1.3 billion on early childhood education per year, this is only 1 percent of the ministry's overall budget.

In addition, the Taiwanese family is increasingly taking many different forms. Therefore, the government would be well advised to pay allowances directly for childbirth and childcare, rather than handing out family allowances. France, for instance, has chosen to directly subsidize childbirth, paying allowances for pregnancy, infants and day care. As a result, France's once alarmingly low birthrate has continued to climb, with 2.02 children born to every woman in 2008, the highest birthrate in Europe.

Is the signing of ECFA important? It is. Does it matter whether national health insurance premiums are hiked? It does. Should we care about the upcoming mayoral elections in Taiwan's five major cities? We should. But for Taiwan's long term development, it is clearly much more crucial to create an environment that is fair to women and friendly to kids, an environment that enables women to make a decent income and reconcile family and work.

Translated from the Chinese by Susanne Ganz