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Tuesday, May 21, 2024

Hong Kong’s Baby Bonus | A Solution or a Mirage?

The Crisis of Low Birth Rate

Hong Kong is facing a crisis. Schools are failing to reach minimum enrollments, forcing them to merge with other schools. At least five schools face closure. This is not due to poor education or lack of interest in studying. The city simply does not have enough children. Hong Kong’s birth rate is among the lowest in the world.

To ensure a stable population, a birth rate of 2.1 is needed. In Hong Kong, it’s 0.9, less than one child per woman.Hong Kong’s Baby Bonus

In 1961, Hong Kong had 35 babies per thousand people. By 2021, it plummeted to 5.2 births per thousand people and it keeps getting worse. Hong Kong’s Baby Bonus Until a few years ago, women with one child were the norm. Today, only 27% of women in Hong Kong have one child. The norm now is women without children, forming 43% of the female population in Hong Kong, more than double since 2017.Hong Kong’s Baby Bonus

The Baby Bonus

The government is scrambling for solutions. It already gives tax incentives to new parents and now wants to introduce cash handouts. New parents will get a bonus of $2,500 for having a baby, termed as a ‘baby bonus’. This concept isn’t new and has been implemented by many East Asian countries facing a population crisis.

For instance, Singapore offers more than $8,000 to new parents for the first two children and about $9,500 for the third child. Hong Kong’s Baby Bonus South Korea gives about $500 every month until your child turns one, i.e., $6216Hong Kong’s Baby Bonus and Japan provides a monthly allowance of about $100 until the child turns two,i.e.,$2,568Hong Kong’s Baby Bonus

The Shortcomings

However, Hong Kong’s baby bonus policy has been met with disappointment. The handout seems generous but falls short when compared to other East Asian countries. In fact, it barely covers a month’s rent in Hong Kong. If you rent a 500 sq foot flat, you’d pay about $2,200 on average – that’s 90% of your baby bonus.Hong Kong’s Baby Bonus

Research suggests that while money is helpful, it doesn’t spur a meaningful increase in birth rates. Cash handouts for new parents have not worked elsewhere as Asian countries continue to struggle with plummeting birth rates.Hong Kong’s Baby Bonus

The Solution

The solution lies in effective problem-solving and not just throwing money at the problem. Pro-family policies, changes in social attitudes, and financial support are needed. France makes for a good case study here – despite its declining birth rate, it’s still among the higher ones in Europe due to the country’s pro-family policies.Hong Kong’s Baby Bonus

If Hong Kong wants a sustained increase in its birth rate, it needs a holistic approach that includes tax breaks for families, housing assistance, public childcare, and family-friendly work policies.

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