In today's Finshots we talk about fertility rates, China's three child policy, and why is it so hard to optimize population levels


The Story

When people make sweeping assertions about birth rates and population control, they’re almost always wrong. Because fertility rates aren’t dependent on a single variable. Instead, there are multiple factors at play here. For instance, back in 1974, Dr. Karan Singh, a former parliamentarian, famously proclaimed — “development is the best contraceptive” while leading the Indian delegation at the World Population Conference in Bucharest.

And he was right. In most cases, you can see a clear correlation between income levels and fertility rates. As countries make development a priority, women choose to have fewer children. However, development is a catch-all term for so many things. And when you parse through each individual variable that affects development, you’ll see that there is incredible complexity underneath.

In some cases, education is a massive factor. Women that have access to education, often choose to delay childbirth. Delaying childbirth inevitably means fewer children. But how do you make sure women have access to quality education? Sure, policy decisions could make a dent here. But society, culture, and religion also play a huge role. In other cases, women have more children because they don’t have access to contraceptives. In fact, 20 years later after making the original statement, Dr. Karan Singh reversed his position and proclaimed — ‘contraception is the best development.’


In underdeveloped countries, for instance, mortality rates are still very high. Kids die young because of disease and malnourishment. And women are often forced to conceive multiple times to offset this horrible predicament. Bottom line — Fertility rates are dependent on a whole host of complicated factors and it isn’t prudent to reduce it into a simplistic equation.

So when we say birth rates in China soared for most of the 20th century, we are implying that women chose to have multiple children for a whole host of complicated reasons. This distinction is very important because it helps you see why the Chinese intervention (in the late 1970s) was perhaps one of the most extreme examples of curbing population — as they began enforcing the one-child policy across the country without accounting for any of this complexity. To mandate compliance, provincial governments set up “neighborhood watch” to report transgressions. People were asked to spy on each other and if you had more than one child, you could be forced to use contraception, undergo abortion, sterilization, and lose out on employment opportunities. While many still debate the efficacy of the program, the general consensus is that population growth rates dropped precipitously over the last few decades. But this was also a time when the country made considerable progress on the economic front.

Soon, it was becoming evident that the lack of procreation was giving way to an ageing population. And everybody knew that unless China could find ways to reverse this trend, the economic engine was bound to run out of steam soon enough. So the Chinese state sprung into action. They eased the one-child policy to introduce the two-child policy in 2016. But then, just 5 years later, they are now introducing a three-child policy i.e. Couples can have up to 3 children in the country without facing any consequences from here on in.

And at this point you have to ask, why the urgency?

Well, as one Chinese civil servant succinctly pointed out 

It is increasingly clear that China must face its shrinking population problem head-on. Even then, however, it may be too late. Once a country’s population begins to decline, that process is extremely difficult to reverse. Over the past few decades, there have been virtually no cases of countries reversing population decline after birth rates started to fall. In Japan, South Korea, and Singapore — the countries with fertility patterns most similar to China’s — births have been falling for years, despite their governments’ best efforts to incentivize childbearing.

And that’s the catch here. Raising more kids is an expensive affair especially when development is still on the rise and urbanization continues to curb birth rates. More importantly entire generations have lived a life without siblings. Once these experiences become common place, it’s almost impossible to reverse them completely. Some countries have tried offering cash handouts to parents who choose to have more kids. Other countries have tried to help out by offering them support with child care. Even others have tried opening up their borders — incentivizing immigration. But none of them have shown to really buck the trend.

So if you were wondering why China is suddenly introducing a three child policy, know that this is perhaps the last chance they have to turn the population tide. Until then…

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