We have to be very clear about why we want the fertility rate to go up. LKY said it very well in the above speech why we need to solve our the population problem and why immigration is not the answer. If Singaporeans who form the core of this country shrink and immigration is used as a solution, much that we value and want to pass on as a people will start to diminish. Immigration makes the problem worse not better.
Some others have argued that we have an ageing workforce and we need more immigrants to prevent us from losing our competitiveness. Here is the situation:
Yes, our resident workforce is ageing however our total workforce is young. Why? The resident workforce form 2M of our workers and we have 1M foreign workers on work permits and employment pass that are renewed with age as a criteria. The total workforce is "artificially" young as result of the transient component that is "refreshed" every few years. In recent years we have a rising structural unemployment as older Singaporeans find it hard to get good jobs precisely due to this skewed demographics brought about by the foreign influx. So to argue that we need more immigrants to offset an ageing workforce to compete economically is incorrect because we have already overcompensated for this problem in the last 10 years.
So the best way forward, I would argue is to solve the low fertility problem and not resort short term approaches that worsen the situation. Raising our low fertility rate is, however, not an easy thing to do. For a start we have to understand why our fertility rate has fallen. One clear reason is the success of the PAP govt "Stop-at-2" policy that spent a good part of 2 decades telling people to have fewer babies. The PAP govt then move on to a eugenics based policy - they wanted only graduate mothers to have more children. We see the remnants of this thinking in the HOPE scheme [Link]that gives incentives to less educated and poorer parents if they have fewer children - this help "the poor to have fewer children" type schemes is highly discriminatory and depresses our fertility rates. 400,000 or 25%-35% of Singaporean workers have low income [Link] so govt fertility boosting schemes are far less effective if we leave out this large group. In the past few years, the govt has given out incentives in the form of tax rebate that only can be fully utilized by higher income groups - giving money to those who already have money as an incentive to have children is far less effective giving it to those who are poor and need the extra financial help to raise their children.
We have to superimpose what the PAP govt has been doing on thephenomena of falling birth rates in developed countries.
Developed countries have low birth rates because
- It is expensive to look after large families
- More women prefer to concentrate on their careers
- Increasing sexual equality has meant women have more control over their own fertility
- There is a ready availability of contraception and family planning advice
In Singapore, it was a deliberate effort on the part of the govt to encourage married women to work to mobilize more people to expand the workforce for economic growth. In fact, if you're filling the tax forms, you will notice a large number of incentives to encourage married women to work and if a woman is a housewife looking after her children, the family loses out not only on her income but the tax breaks given to families with both parents working. These days due to the rising cost of living, many families have no choice but to have both parents working or they will face financial hardship. As a survival strategy, when we move from developing to developed country, child mortality falls and training/education rises in importance so families in developed countries have fewer children so that they can concentrate their financial resources to nurture a smaller number of children successfully.
All the above explains why our fertility rate is low ...but why does Singapore have the lowest fertility rate in the world? Our fertility rate has quite incredibly plunged below that of Japan. Singapore has the lowest fertility rate in the world if we count independent nations. If we look at territories, we are right down with Hong Kong & Macau which are part of China[Link]. The 3 places with lowest fertility - Singapore, Macau and Hong Kong also have the highest population density in the world. High density = high stress = high housing cost = low fertility?
The above tells half the story about fertility. Now for the other.
Research shows that while fertility rate falls when countries go from developing to developed status, if further economic advancement is made say in per capita GDP, the fertility rate rises back up[Does economic development drive the fertility rebound in OECD countries? ]. When you go from developing to developed country status you have fewer children so that you can educate them better. But if there is further economic advancement and you make more money adding another child to the family becomes less of an issue:
Strangely, it is another phenomena that Singapore shows an abnormaly ...our per capita GDP has risen yet our TFR has fallen monotonically. On paper on a per capita basis. we are richer than many of the European countries with higher fertility rate ..why hasn't our fertility rate rebounded? The answer to that is our income inequality is the highest among developed countries and the increase in GDP is concentrated in the top 10% of the populace - the fruits of our economic advancement have not been shared widely but the cost of this economic progress in the form of higher housing cost, higher cost of living is shouldered by all.
Given all the above evidence, it is clear what needs to be done. The burden of higher cost of living and cost of raising a child has to be addressed. The govt needs to reach out to all including the large segment of low income Singaporeans to solve this problem - it has to stop all discriminatory practices. In the area of education, the govt has to step in to aid poor families in the area of pre-school and give more help to these families to raise their children. Housing price increase has to be moderated and kept below the rise in median income in order to generate surplus financial resources for middle income families to raise another child. Overall cost of living (inflation) has to be kept down relative to wages - if you look at the chart above on fertility vs PPP (Purchasing Price Parity), fertility swings back up wages rise relative to cost of living. Take care of healthcare so that parents can have more children without worrying about rising medical costs and especially children born with congenital health issues because this is one of the biggest fear of parents when they have children ...when people find out the govt does not cover these children in its MediShield and parents receive little help to care for these children, they will have fewer children.
It helps a lot if life in Singapore is less competitive and less stressful. We can start with the education system which has turned into one big sorting machine obsessed with exam scores and streaming. There is intense competition for homes, cars, jobs etc.no thanks to the huge influx of foreigners that made scarce resources like COE and housing even scarcer.
Many of the things that needs to be done to encourage Singaporeans to have more children are things that also raise the quality of life for Singaporean families. It is not a question of whether Singapore has the resources to do this - we seem to have no issue spending $10 billion a year on defense in an increasingly globalized world where nations around us depend on international trade and cannot afford to misbehave...we don't question this high level of spending which is higher than Malaysia and Indonesia combined. But what is the point of spending so much on defense when the people you're defending faces the threat of decline by way of low fertility. The question is whether we have the will to fix this problem and not resort to short term "non-fixes" like importing more people and making the situation worse.