17 May 2023
The Baby Bonus Doesn’t Work Any More
By Gwynne Dyer
I was one of five children – not seen as a particularly big family in Newfoundland at the time – and there was one year when we allegedly beat Guatemala to have the highest birth rate in the world. (That’s probably not true, but people were proud of it anyway.) Then we joined Canada in 1949, and got access to what Newfoundlanders called the ‘Baby Bonus’.
The ‘family allowance’, as Canadians called it, was a serious amount of untaxed cash on the table for a great many families, for Newfoundland was then probably the poorest place north of Mexico. In fact, many believe the Baby Bonus was the main reason Newfoundland voted to join Canada.
You would have expected the birth rate to go even higher after that, because children meant cash. But instead the birth rate started to fall, slowly at first, and then faster.
Girls got better educations, women had more choices, and people moved to the bigger towns and the one large city. By now the average woman in Newfoundland has only 1.36 children in a lifetime, and the population is falling steadily.
So I wouldn’t hold out much hope for China, Japan and most European countries to stop the steep fall in their populations with cash bribes either. It doesn’t work that way.
Leading the way are South Korea, Japan, Spain and Italy, all of which will see their populations fall by more than half in this century. China is just getting started, with a fall of almost one million in its population announced in January, but it will also end up dropping by half by the end of the century: from 1.41 billion now to only 732 million in 2100.
Another 18 countries face the same fate (Thailand, Portugal, Bulgaria, etc.), and by mid-century 151 countries will have a falling population. By the end of the century almost everywhere will, even in Africa. The response, in the places where it is happening already, has almost everywhere been to try to get the birth rate back up.
South Korea, with the world’s lowest fertility rate, has spent over $200 billion in the past sixteen years on various child-related programmes to raise the birth rate, but to no avail. The average number of children per woman needed just to keep the population stable is 2.1; Korean women are having an average of 0.78.
The pro-natality strategies are now far more sophisticated than just a flat-rate Baby Bonus. They include big lump-sum payments for new parents, free education, subsidised daycare programmes for working mothers, tax incentives and expanded parental leave – but nothing works.
In February Japan declared it will double the country’s child-rearing subsidies to 4% of GDP –$150 billion a year – but even that’s unlikely to get the birth rate up. The only way to keep the population stable or even growing in a developed country is mass immigration – which means you have to be attractive and welcoming to potential immigrants.
The English-speaking countries do that best. Canada, with 40 million people, is the world leader in proportional terms, bringing in another half-million a year. Australia is doing almost as well, and the United Kingdom, New Zealand, and the United States are all managing around half that rate.
The great benefit they get from doing this is that they keep the ratio of younger people in the workforce to dependent older people high enough to afford a state that takes care of all its people. (Even the US is a welfare state, although a skimpy one.) So why don’t all the other industrialised countries, including China, Korea and Japan, do the same?
They will probably have to, in the end, but they have no long experience of multi-ethnic cultures and they’re anxious about losing their ‘identity’. It’s nonsense: second-generation immigrants almost invariably adopt the language and culture of the country they were born in. But don’t expect the average Chinese, Norwegian or Turk to believe that yet.
Where will the mass immigration come from? Mostly from Africa, the one continent whose population will go on growing rapidly until the 2060s – by which time Africans will probably account for about a third of the world’s population.
That high population growth rate will keep a great many Africans poor, but they will be in high demand elsewhere as potential immigrants. Even the East Asian countries will have to swallow their racism and open their doors, or their economies will wither for lack of people to fill the jobs and care for the elderly.
There’s no harm in having a smaller population, but getting there can entail several generations of economic hardship. The only way to soften the transition is mass immigration, so that will happen even in the unlikeliest places. The day will come when black Chinese are no longer a rarity.
To shorten to 700 words, omit paragraphs 6 and 7. (“Another…0.78”)