Institutional change to compensate for low birth rates: The Chinese situation,and comparison with other countries

Population trends are a priority subject in studies of the world’s future (Rogerson, 1997). Although overpopulation is typically considered to be the most serious problem, declining birth rates have made the prospect of population declines in developed nations a significant demographic challenge. Population declines are expected to become increasingly serious in the future (Bongaarts, 1998). World population growth rates have declined since the peak rate of 2.2% per year, which occurred in the early 1960s (Myrskylä et al., 2009). In recent decades, we have witnessed a remarkable decline in fertility rates (expressed as the number of births per 1000 women of reproductive age) in the industrialized world (Jensen et al., 2004; Lutz, 2014). In many countries, fertility has already dropped below the nominal replacement rate of two children per woman (Pearce, 1999; Prettner et al., 2013). In 1960, five countries had fertility rates at or below the replacement level; by 2000, there were 64 such countries, which accounted for about 44% of the world’s people (Cohen, 2003). Lutz et al. (2001) estimated an 85% chance that the world’s population will stop growing before the end of the 21st century. Most of the world’s population either already lives or soon will live in countries or regions where fertility is below the replacement level (Myrskylä et al., 2009; Wilson, 2004).

By the middle of the 20th century, China’s population had become the largest in the world and was also among the fastest growing (Peng, 2011). This raised growing concerns about China’s ability to feed itself and about the ecological impacts of such a large population. To slow the population increase and return the population to more sustainable levels, China implemented its infamous one-child policy in September 1980; with the exception of ethnic minorities, each couple was allowed to have only a single child, and after three decades of this birth control policy, China seems to have achieved its goal, with a total fertility rate of around 1.5, which is well below the replacement level (Cai, 2013). The number of children per family was expected to decrease in the future. In 2013, China relaxed its birth control policy to permit couples in which either spouse is an only child to have two children, however, given how recent the policy change is, statistics on the response are not yet available; moreover, it may take some time before fertility rates increase (Basten and Jiang, 2014).

The population decline has resulted from increasing numbers of women who have chosen to reduce their number of children for any of several reasons (Reher, 2007). As in much of the world, young people in China do not want to have many children. Surveys have revealed that the ideal number of children averaged 1.45 in China’s developed eastern province of Jiangsu, and 1.8 in the less developed western province of Shaanxi; in addition, another nationwide survey conducted by the National Health and Family Planning Commission of China found that the ideal number of children reported by respondents averaged 1.93 (Jiang et al., 2015).

In an agricultural economy, particularly in unindustrialized countries, high birth rates are necessary to provide enough laborers for food production. However, in an industrialized society, fewer workers are required because technology takes the place of labor, and this relieves the pressure on women to bear children (Clark et al., 2009). In addition to the risk to the mother’s health from bearing children, economic development and social progress have increased both the direct cost of raising children (e.g., food, clothing, education) and the indirect (opportunity) cost, in terms of lost economic opportunities and opportunities for personal development (e.g., writing books) for parents who stay home to raise their children (Diprete et al., 2003; Zhang and Li, 2002). Other factors have contributed to decreasing fertility rates: changing cultural expectations, couples living together without marrying, and high divorce rates (Cohen, 2003).

Zeng and Wang (2014) estimated that the Chinese population is aging rapidly (that is, the mean age is increasing), in part due to the one-child policy, but predicted that the two-child policy will improve these demographics by increasing the number of younger Chinese. Nevertheless, others have argued that the current version of the two-child policy is not an adequate long-term solution, and that it must be replaced by a universal two-child policy as soon as possible (Zeng and Wang, 2014; Zhai et al., 2014). One reason for this suggestion is the belief that this will produce significantly more consumption and job opportunities associated with childbearing (e.g., medical care, production of food for children) and child-rearing (e.g., private “nannies” or public daycare centers to care for the children while parents work), and that this would enable China to more fully employ its large population in the coming decades. These additional new babies will also enter the labor force about 20 years from now, when they will help to resolve a predicted labor shortage as older workers retire (Zhai et al., 2014).

However, even under a universal two-child policy, couples with only one or two children will still have to support as many as four aged parents in addition to their children, and this will create a greatly increased economic burden compared to that of couples with one or no children or who must care for old parents and only one child (Zeng and Wang, 2014). Zhai et al. (2014) reported the results of recent surveys that suggest only 60% of those who qualify to have two children under existing exemptions will choose to have this many children, suggesting that China is unlikely to become a two-child society, even after implementation of a two-child policy for all its citizens.

If a nation’s human population is not managed at a demographically sustainable level, economic problems will develop that endanger economic and social stability (Chu and Ching, 2001; Anonymous, 2002). The ongoing global fertility decline in developed nations is leading to aging of the population; the proportion of adults older than 60 years is expected to rise from 10% in 2000 to more than 20% in 2050 (United Nations Population Division, 2003). Because the older members of society often stop working, their incomes generally decrease, leading to both decreasing per capita income and spending and to decreasing savings; these changes can decrease the amount of money available to sustain the operation of a society, and the increasing proportion of aged citizens can place a heavy burden on the population of working-age citizens, whose taxes help to support these retired people (Cruces et al., 2012; Gule, 1999).

Accordingly, continued low fertility will complicate the economic difficulties posed by an aging population (Department of Economic and Social Affairs, Population Division, 2004). This may affect entire economies, because labor is an indispensable production factor, and the number of workers is proportional to the population (Prettner et al., 2013; Zhang and Li, 2002). Population increases during the last half of the 19th century were responsible for increases of 12.5 to 32.9% of the economic growth during this period (Ricker, 1997). Even if future economic development will support the rapidly growing numbers of aged people, it will not prevent the social issues related to an aging population (Henseke, 2011; Zhang, 1999).

If we develop no effective measures to solve these issues, the world’s population will continue to age, and some smaller ethnic groups may face extinction (Luo, 2002; Prettner et al., 2013). This phenomenon endangers human cultural and genetic diversity (Braun and Hammonds, 2008). Current estimates (Cao and Wang, 2010; Peng, 2011) suggest that by around 2040, China’s population will begin to decline rapidly. Given the importance of labor for sustaining China’s rapid economic growth, this may have important consequences for China; it will also have consequences for other developed countries, many of which depend heavily on China for manufactured goods and may suffer economic consequences from adverse changes that occur in China.

Some researchers believe that fertility declines in the absence of socioeconomic development (Abemethy, 1993). However, the relationship may be in the opposite direction; declining fertility can instead cause declining socioeconomic development (Jóźwiak and Kotowska, 2008). In contrast with Europe, East Asian countries have experienced a more rapid economic modernization process, and the rate at which the fertility rate has declined (measured as the time required for fertility to drop from 30 to 20‰) has been equally rapid, with the change occurring in 5 to 17 years in Asia, versus 16 to 77 years in Western countries (Table 1). Accompanying this change, the social institution of children caring for their elderly parents has been largely replaced by an institution in which society cares for the elderly (Shi and Zhang, 2008). Because parents no longer need large families to support them during their old age, they can produce smaller families, and in countries around the world, it has proven difficult to encourage young adults to have more children. In the developed world, the potential adverse consequences of prolonged below-replacement fertility have led to extensive discussion but little action because lower birth rates have been more than balanced by immigration from areas with higher birth rates (Cao et al., 2010; Odum and Odum, 2001). For example, in the Western United States, 14.8% of the population is foreign-born, with lower values of 10.3% in the Northeast, 5.3% in the South, and 3.6% in the Midwest (Xu, 2000).

OPEN IN VIEWER

Table 1.

Relationship between the year when a given birth rate was reached and a country’s modernization process (Abemethy, 1993; Jóźwiak and Kotowska, 2008).

	Year when the birth rate was reached
Birth rate (‰)	France	Sweden	Belgium	United States	Japan	Germany	Korea	China
30	1832	1880	1886	1897	1938	1910	1971	1972
20	1909	1922	1924	1929	1955	1926	1985	1977
Time between the two rates (years)	77	42	38	32	17	16	14	5

Numerous policy options have been proposed to encourage childbearing: these include free or subsidized childcare, reduced taxes for families with children, paid parental leave, and subsidized housing for young couples (Bongaarts, 1998). Unfortunately, there has been little useful experience to draw on in assessing the potential effectiveness of these and other options (Jóźwiak and Kotowska, 2008).

Adjusting the population policy from the current goal of reducing the population to a more pragmatic goal of demographic adjustment based on sustainability would be a better approach for China (Jiang et al., 2015). However, one thing is clear: without finding appropriate incentives for women to have more children, the ongoing population decline will not cease (Cao and Wang, 2009). Although some futurists have speculated that new technologies may solve this problem (e.g., artificial wombs in which babies can be incubated, thereby sparing women the burden of childbirth), it is unclear whether such a solution would be accepted by significant numbers of women (or men), and the social and psychological consequences are also unknown (Simonstein, 2006). Therefore, technological innovation is not an effective solution in the near future. This realization may also reveal the true nature of the problem: that social institutions have evolved that encourage or require low birth rates.

Institutions represent the mechanisms by which a society regulates the behavior of its citizens and the interactions among them. In the context of declining birth rates, these institutions include both freedom from the necessity to raise large families to provide food for the family and care for elderly relatives, inexpensive access to birth control measures and social ethics that support the use of these measures, the lack of social pressure to have children (i.e., this is no longer seen as a woman’s duty), the high cost (in both money and time) of raising children, and factors that encourage women to have careers rather than children.

We believe that it will not be possible to increase birth rates without understanding these and other institutions so we can find ways to help them to evolve or can replace them with newer institutions. For example, when cost is a barrier to having more children, improved government subsidies can eliminate this problem; when time is the barrier, subsidized maternity leave that also protects a woman’s employment, combined with high availability of daycare for young children, can mitigate this problem. When sacrificing career opportunities is the problem, more radical changes may be required. For example, government legislation in most Western countries provides increased protection for women who want to pause their career to have children by protecting their salary, benefits, and career path. However, this protection is insufficient and has not, by itself, increased the fertility rate (Jóźwiak and Kotowska, 2008). A more radical institutional change, such as encouraging husbands to become the primary caregiver for children, may be required.

Some researchers (e.g., philosophers, anthropologists) oppose such an approach from an ethical perspective, since they believe that such measures would coerce women to bear children against their will. However, there is also an ethical argument to be made that more children are necessary for social stability and to preserve groups that might otherwise disappear from our world. There is no easy way to reconcile these contradictory perspectives. One possibility may be to seek innovative solutions that provide incentives without coercion. Innovation is the key to social and economic development, and such innovations could lead to institutional change (Hayami, 1998). During the 1960s, birth control became an example of one such innovation: it was highly liberating to those who chose to use it, but those who objected to its ethical implications were in no way coerced into using it. Unfortunately, one of the unanticipated consequences of this technology was a dramatic decline in birth rates, leading to the consequences we have already discussed. In addition, it became apparent that contraceptive services were only one part of a comprehensive women’s health care system (Faundes and Hardy, 1995).

One important component of institutional change must be to enhance the status of women so they have equality to men in practice, not just in theory. This requires a careful consideration of the unique challenges that women must face. Women will be more likely to be willing to bear children if society gives this activity status equal to economic activity (e.g., a career), provides enough financial support that having children does not seem to be an economic sacrifice, and provides enough social support (e.g., daycare, helpers for young mothers) that having children does not seem to be an enormous sacrifice of the mother’s right to spend time on her own objectives rather than only on those of her children. Unfortunately, all of these measures will be difficult to implement because they are not supported by existing institutions, and it will be difficult to create new institutions that will support them.