Vietnam’s Baby Bonuses Unlikely to Stop the Aging Clock

Vietnam’s Demographic Challenge: New Policies May Not Reverse Aging Trend

Tempatdonasi.com – Beginning July 1, Vietnam implemented its inaugural Population Law, establishing multiple incentives designed to motivate couples toward larger families. Among the provisions, women belonging to designated categories will obtain a childbirth allowance averaging €66, equivalent to approximately $75. Additionally, female workers delivering their second child now qualify for seven months of maternity leave, an increase from the previous six-month period. Fathers whose spouses give birth to a second child will receive ten working days of paternity leave, representing a doubling of the former entitlement.

Initial prenatal and newborn screening subsidies will target specific groups before extending across the entire nation by January. Households possessing two or more biological children could gain preferential treatment when accessing social housing. These measures arrive after Vietnam eliminated its decades-old two-child restriction the previous year. Nevertheless, altering the nation’s demographic trajectory presents considerable difficulties.

Record Low Fertility and Projected Changes

Vietnam’s fertility rate plummeted to 1.91 children per woman in 2024, establishing a historical minimum that falls substantially beneath the replacement threshold of roughly 2.1. Demographic projections indicate that by 2050, the working-age segment—individuals between fifteen and sixty-four years old—will decrease from 68.6 percent to 63 percent. Concurrently, the elderly population aged sixty-five and older should expand from 8.4 percent to 21.2 percent, according to data from the United Nations Economic and Social Commission for Asia and the Pacific.

A primary worry involves Vietnam experiencing demographic aging prior to achieving substantial wealth. The country’s GDP per capita stood near $5,000 last year, considerably trailing the economic levels attained by Japan, South Korea, and Singapore during comparable phases of societal aging.

“If countries age before becoming rich, economic growth may slow, while income inequality and pressure on healthcare and social support systems may increase,” Bussarawan Teerawichitchainan, an associate professor of sociology and co-director of the Center for Family and Population Research at the National University of Singapore, told DW.

“This could have serious implications for well-being, especially among older adults with limited resources,” she added.

Regional Patterns of Demographic Transition

Throughout Southeast Asia, declining fertility combined with extended lifespans are transforming social structures, albeit at different paces. Singapore witnessed its population aged sixty and above outnumber those under fifteen approximately in 2010. Thailand achieved this milestone during the mid-2010s. Vietnam is anticipated to reach this threshold around 2035 based on UN estimates.

The substantial rise in elderly citizens creates mounting pressure on healthcare infrastructure and government finances responsible for pension disbursements and supplementary assistance. This situation proves particularly problematic in Vietnam, where pension and social-insurance participation remains inconsistent, especially within the nation’s extensive informal employment sector.

Thailand demonstrates that elevated income levels do not automatically resolve these difficulties. Its welfare framework, medical services, and employment market are already adapting to a contracting workforce alongside a swiftly expanding elderly demographic.

Migration and Policy Perspectives

Aging patterns differ across Southeast Asia, generating both obstacles and possibilities. Thailand has historically depended on migrant laborers from Cambodia, Laos, and Myanmar, nations where working-age populations are forecasted to expand or stabilize by 2050. Such migration potentially alleviates labor deficits in construction, agriculture, manufacturing, and caregiving sectors, though it necessitates enhanced protections and service access for migrant populations.

Singapore has consistently utilized immigration and foreign workers to sustain its labor force, despite migration remaining a politically delicate subject. Vietnam differs markedly with a minimal immigrant community and demonstrates reluctance toward substantial inward migration as a response to aging.

Nevertheless, numerous analysts contend that policymakers should reconsider their approach. Rather than treating aging exclusively as an economic issue solvable through increased births, governments ought to prioritize enabling citizens to maintain longer, healthier, and more productive lives.

In Thailand and Vietnam, policy discussions continue emphasizing total fertility rate due to its clarity as a measurable objective, noted Wiraporn Pothisiri, an associate professor at Chulalongkorn University’s College of Population Studies. However, “fertility has continued to decline despite these efforts, suggesting that low fertility is driven by broader structural economic and social changes that cannot be reversed through pronatalist policies alone,” she explained to DW.

These fundamental factors represent consequences of broader transformations that extend beyond simple financial incentives or extended leave periods.