The Little Red Dot has a grey-colored problem.
Singapore, one of the four economies dubbed “Asian Tigers,” is in danger of experiencing a population transition towards an economy of the elderly. The combined effect of one of the world’s lowest birth rates and an ageing population has the potential to severely hamper the city-state’s well-being in the future unless it adjusts its course.
It wasn’t always this way, however, as Singapore’s earliest years were marred by the exact opposite of this problem. Like many developing countries at the time, Singapore was undergoing massive population growth at the end of the Second World War and could hardly keep up in terms of economic development. Facing an overpopulation problem and resource scarcity, Singapore implemented government programs of family planning, contraception, and a campaign called “Stop at Two” which advised mothers to have up to only two children. Singapore also adopted various financial measures to dissuade mothers from having more than two children, such as reduced or no maternity leave and increased childbirth fees in government hospitals.[1] In doing so, the government was able to successfully slow down the population growth—almost too well as time would show.
In order to sustain a population, fertility rate per female needs to be around 2.1 births per female assuming stable mortality rates and no net migration flows[2]: Singapore today stands at a measly 1.1 births per female. An overall decline in the population is already taking place: 2021 marked the largest annual recorded percentage decrease in Singapore’s population since 1950 of 4.1%. Not only does this demographic situation come with a declining population over time, but the existing population will be ageing as well. Increased life expectancy that comes with Singapore’s advanced standard of living also exacerbates this situation.
When looking at an ageing population coincided with low birth rates, a variety of social and economic consequences can be foreseen. For instance, a proportional increase in the amount of senior citizens will increase reliance on state pension funds and on the increasingly shrinking class of income earners. This phenomenon is currently being observed as the “sandwich generation” where Singaporean adults are faced with financial pressure from two generations of dependents: their children and their parents.[3] In almost an ouroboric fashion, future “sandwich generations” are less incentivized to have children and therefore further exacerbate the problem. Slowed economic growth in terms of domestic labour force size can also be expected as the labour pool shrinks, as well as reduced tax returns on the increasingly strained government pension program. In turn, some economists forecast that reduced living standards may be on their way for future generations given this predicted economic slowdown.[4]
Currently Singapore’s solution to this problem is to encourage births by providing child tax credits and relying on foreign migrant labour[5] which seeks to combat declining birth rates and the demand for blue-collar labour that the domestic working-age population cannot (or will not) provide. Despite these efforts, the central issue of why Singaporeans are not having children remains unaddressed by current government policy. Societal pressures to succeed in a meritocratic, hyper-competitive society that induces a great deal of financial and emotional stress on children and parents may be the central reason why Singapore’s birth rate has been on the continued decline, despite government efforts to shift this trend. Throwing more money at the problem through child tax credits hasn’t solved the issue, and increased migrant labour remains a temporary fix for what will eventually bring the country into an age of grey.
Singapore could tackle this looming crisis by focusing its attention towards automation[6] combined with a cohesive program to focus on acquiring more immigrants to bolster the labour force. In addition to these measures, the government could attempt to reduce burdens on common expenses that dissuade couples from having children: namely the costs of extracurricular tuition. A final, sociological approach may be to target the underlying cultural roots of Singapore’s infertility. An incredible amount of value is placed upon success and human capital investment in Singaporean culture: almost to the degree that childbearing is placed to the side.[7] Government messaging and efforts to move away from the hyper-competitiveness of Singapore’s school system and job market may seek to alleviate these underlying problems.
Alternative viewpoints do exist on this issue, as Bloomberg columnist Daniel Moss writes on how the decline of Singapore population growth may not spell economic catastrophe for the nation. His argument rests on the basis of Singapore’s reputation as a safe investment hub for corporations combined together with its openness to immigrant labour that will carry Singapore into a continued prosperous future.[8] It is difficult to say how exactly this demographic shift will affect Singapore, but monumental changes are on the horizon as the passing of time signals a new age of grey.
Je Ho Cho is a second-year student at the University of Toronto and is a Contributor in the Southeast Asia Section at Synergy.
Bibliography
“Employment Bill.” Singapore Statutes Online. Accessed February 7, 2022. https://sso.agc.gov.sg/Bills-Supp/21-1968/Published/19680518?DocDate=19680518.
Moss, Daniel. “The Singapore of the Future Is Small and Rich.” Bloomberg.com. Bloomberg, March 22, 2021. https://www.bloomberg.com/opinion/articles/2021-03-22/singapore-s-shrinking-population-doesn-t-spell-economic-doom.
Ong, Justin. “Population Decline Raises Issues around Singapore Society, Identity.” The Straits Times, September 30, 2021. https://www.straitstimes.com/singapore/politics/debrief-population-decline-raises-issues-around-singapore-society-identity.
Tan, Francis. “Singapore: Reaching A Critical Demographic Crossroad In 2018.” UOB Group, December 6, 2017. https://www.uobgroup.com/assets/pdfs/research/MN_171206.pdf.
Tan, Poh Lin. “Lessons from Singapore on Raising Fertility Rates – IMF F&D.” Lessons from Singapore on Raising Fertility Rates – IMF F&D. International Monetary Fund, 2020. https://www.imf.org/external/pubs/ft/fandd/2020/03/lessons-from-singapore-on-raising-fertility-rates-tan.htm.
“Who Are the Sandwich Generation?” NTUC Income. Accessed February 7, 2022. https://www.income.com.sg/blog/who-are-the-sandwich-generation.
“‘Fertility’ in OECD Factbook 2015-2016: Economic, Environmental and Social Statistics.” OECD Publishing. Accessed February 7, 2022. https://www.oecd-ilibrary.org/docserver/factbook-2015-en.pdf?expires=1544702243&id=id&accname=ocid194641&checksum=1FCA9DDC12312B750ED3B2B0CC8DCA25.
[1] “Employment Bill,” Singapore Statutes Online, Accessed February 1, 2022.
[2] “Fertility” in OECD Factbook 2015-2016: Economic, Environmental and Social Statistics, OECD Publishing, Accessed February 1, 2022.
[3] Who Are the Sandwich Generation?” NTUC Income, Accessed February 1, 2022.
[4] Francis Tan, “Singapore: Reaching A Critical Demographic Crossroad In 2018,” UOB Group, December 6, 2017.
[5] Justin Ong, “Population Decline Raises Issues around Singapore Society, Identity,” The Straits Times, September 30, 2021.
[6] Daniel Moss, “The Singapore of the Future Is Small and Rich,” Bloomberg.com, Bloomberg, March 22, 2021.
[7] Francis Tan, “Singapore: Reaching A Critical Demographic Crossroad In 2018,” UOB Group, December 6, 2017.
[8] Daniel Moss, “The Singapore of the Future Is Small and Rich,” Bloomberg.com, Bloomberg, March 22, 2021.