Yuwa Population Research 2023 12 Expert Team: Liang Jianzhang, Mao Zhenhua, Ren Zeping
Huang Wenzheng, He Yafu.
At present, China is facing the two major problems of sluggish domestic demand and sluggish fertility rate, and can stimulate consumption and expand domestic demand in the short term by vigorously issuing birth subsidies, and boost the fertility rate and enhance social vitality in the long term.
Now our country is facing almost the lowest fertility rate in the world, with a fertility rate of less than 1 in 20221。From 2017 to 2022, the number of births in China has declined for six consecutive years.
At present, young people are reluctant to marry and have children, the declining birthrate is severe, and the population has shown negative growth.
Fortunately, the whole society has begun to pay close attention to China's population problem, and the country has actively adjusted its strategic response, from "letting go of the three children" to "improving the birth support system". However, since the second half of 2023, the frequency of relevant childbirth and childcare subsidies has decreased significantly, and the subsidy policies introduced in some regions have not been implemented and are still on paper, mainly due to the lack of local financial resources and motivation. It is recommended to establish a national level to encourage childbearing** and provide targeted subsidies to families with children.
1. At present, China's fertility rate is at the bottom of the world, and it is facing an increasingly severe problem of declining birthrate
China's new-born population has declined for six consecutive years since 2017, falling to 9.56 million in 2022, halved from 2016.
The low fertility rate in our country is almost the worst in the world. In 2022, China's total fertility rate fell to less than 11, only the replacement level (21) Half of the world's lowest is not only lower than Europe and the United States, but also lower than Japan.
If the total fertility rate remains low, our population will fall into a sustained negative growth. The rate of decline is slower in the first 25-30 years after the population peaks, but it will begin to shrink significantly faster around 2050 as the population born during the period of high fertility from 1962 to 1975 enters the end of its life. The quantity and quality of the population jointly affect the national strength, and with the shrinkage of the total population, it will affect China's large market advantage, and will also affect economic growth and social vitality.
Second, the high cost of childbirth is the root cause of low fertility, and the issuance of subsidies is the most direct way to reduce the cost of childbirth
One of the main reasons for low fertility is the high cost of childbearing. The "Report on the Cost of Childbirth in China" released by Yuwa Population is based on the income and consumption expenditure data released by the National Bureau of Statistics and various prices to estimate various childcare costs. It is estimated that the cost of raising a child aged 0-17 in families across the country is 4850,000 yuan;The average cost of raising children from the age of 0 to the age of college is 6270,000 yuan.
If calculated as a multiple of the cost of raising a child until the age of 18 relative to the country's GDP per capita, Australia is 208 times, France is 224 times that Sweden is 291 times that of Germany, it is 364 times that of the United States is 411 times, Japan is 426 times, our country is 69 times, almost the highest in the world. Due to the high cost of childbirth and the difficulty of women to balance family and work, the average fertility intention (ideal number of children) of Chinese people is almost the lowest in the world.
Therefore, in order to increase the fertility rate, it is necessary to reduce the cost of childbirth for families of childbearing age, and the issuance of childcare subsidies is the most important and direct way to reduce the cost of childbirth. It can be seen that since the implementation of the three-child policy, more and more places have introduced or plan to introduce relevant policies on childbirth or childcare subsidies, and come up with real money to encourage childbirth, but at present, the subsidy is still insufficient, lower than most European countries.
In addition, so far, the specific policies of childbirth and childcare subsidies have been mainly introduced by local governments. We believe that it is more appropriate for the childcare subsidy to be introduced at the ** level. First, because most places do not have enough financial resources to subsidize childbirth, only the first financial resources have this financial resources. Second, because the population is mobile, the local ** is not necessarily the beneficiary of the increase in the birth rate, and the children may grow up to work in other places and contribute to the whole country but not necessarily to the local area. Childbirth is both a family affair and a national affair, so the cost of childbirth should be borne by the family, the state and society.
3. International experience shows that fertility subsidies are positively correlated with fertility rates, and the subsidy funds mainly come from additional subsidies provided by local governments
What is the effect of childcare subsidies internationally?Overall, childcare subsidies are positively correlated with fertility rates, with France and the Nordic countries accounting for a high proportion of household welfare expenditures and maintaining a high fertility rateSouthern European countries are caught in the "low fertility trap" due to insufficient subsidies.
According to OECD (OECD) data, in 2019, household welfare spending in southern European countries such as Italy, Spain, and Greece accounted for a percentage of GDP77%, and the total fertility rate was34；Sweden, Norway, Denmark and other Nordic countries spend on household welfare as a percentage of GDP31%, and the total fertility rate was70。
According to international empirical research, the birth subsidy policy of each country is basically issued by the national government and the responsible family, welfare and social security departments, and the funds come from the financial budget of the country, and the local government and state can provide additional subsidy policies according to the needs of the region and include it in the local budget. For example, the childcare allowance in Germany is implemented by the Länder** or the agency entrusted by it, and the Confederation** bears the cost of the subsidyThe child benefit is administered by the German Federal Department of Labour and financed by the Federal Government**;The basic maternity allowance in Italy is paid by the National Institute of Labor and Social Security;In Russia, the Federal Pension** pays a lump sum transfer allowance to mothers of two, three or more births, and many regions supplement this policy by providing more maternity allowances for families with many children.
Fourth, the most worthy investment at present is children, vigorously issue birth subsidies, short-term stimulation of consumption, expand domestic demand, long-term boost of fertility level, enhance social vitality
Recently, the state has introduced a series of policies such as cutting interest rates and reserve requirements, activating the capital market, optimizing real estate regulation and control, and boosting the private economy. In order to continue to push the economy into the recovery channel, a larger dose of policies is needed.
In the current Chinese economy, children are the best investment. At present, infrastructure investment tends to be saturated, manufacturing overcapacity, real estate supply is balanced, and there is excessive competition in education, but the investment in the number of children is not enough. In the past, China's scientific and technological innovation capabilities have largely benefited from China's huge market and talent scale. But this advantage of scale will shrink in the future as the young population shrinks rapidly. Therefore, it is imperative to reverse the rapid decline in the number of new births as soon as possible. Invest now to have one more child, and the future will not only be a consumer, but also a possible scientific research innovator, but also a cultural and inheritor. So the most worthwhile investment in China today is children.
It is suggested that the recovery plan to expand domestic demand should be started from the national level in the form of birth subsidies, and the distribution group can be inclined to families with elderly and children, because these families have a large demand for childcare and pension expenditures, which can reduce the savings leakage rate of birth subsidies, and at the same time, can effectively reduce the cost of childbirth and parenting for these families and boost the fertility level. In the long run, the new population will increase the demand for products and services such as automobiles, houses, electrical appliances, and tourism, support the development of related industries, and increase employment opportunities.
There is no need to worry about inflation when giving birth subsidies. At present, the key to falling prices and insufficient demand is to stabilize the macro economy, reverse market expectations, and boost consumption.
For the specific plan of maternity subsidy, we recommend that it be issued to families according to the number of children, and give 1,000-6,000 yuan per month to families with children. For example, a one-child subsidy of 1,000 yuan, a two-child family subsidy of 3,000 yuan, and a three-child family subsidy of 6,000 yuan. According to the above subsidy calculation, that is, the one-child family subsidy is 1,000 yuan, the two-child family subsidy is 1,500 yuan per child, and the three-child family subsidy is 2,000 yuan per child. According to this calculation, about 1-3 trillion subsidies need to be provided.
Vigorously issuing birth subsidies will help expand domestic demand, stabilize growth and employment in the short term, and help boost fertility levels, improve human capital and enhance economic and social vitality in the long term.