Vietnam's baby bonuses unlikely to stop the aging clock
Vietnam has joined Southeast Asia's push to raise birth rates, but experts say the greater challenge lies in adapting economies and welfare systems to an
Vietnam has joined Southeast Asia's push to raise birth rates, but experts say the greater challenge lies in adapting economies and welfare systems to an aging population. On July 1, Vietnam's first Population Law took effect, introducing a range of measures aimed at encouraging couples to have more children. Women in select groups will receive a minimum childbirth subsidy of about €66 ($75). Female employees who give birth to a second child are now entitled to seven months of maternity leave, up from six, while paternity leave for fathers whose wives have a second child has doubled to 10 working days. Subsidies for prenatal and newborn screening will initially be offered to select groups before expanding nationwide in January. Families with at least two biological children may also receive priority access to social housing. The law follows Vietnam's decision last year to scrap its longstanding two-child policy. However, reversing demographic trends will not be easy. Vietnam's fertility rate dropped to a record low of 1.91 children per woman in 2024, well below the replacement level of around 2.1. By 2050, the share of Vietnam's working-age population, those aged 15 to 64, is projected to fall from 68.6% to 63%. Meanwhile, the proportion of the population aged 65 and over is expected to rise from 8.4% to 21.2%, according to the United Nations Economic and Social Commission for Asia and the Pacific. A key concern is that Vietnam grows old before it becomes wealthy. GDP per capita reached about $5,000 last year, significantly lower than the levels achieved by Japan, South Korea and Singapore when they were at Vietnam's stage 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 University of Singapore, told DW. "This could have serious implications for well-being, especially among older adults with limited resources," she added. A region aging at different speeds Across Southeast Asia, falling fertility rates and longer life expectancy are reshaping societies, though at varying rates. In Singapore, the number of people aged 60 and above surpassed those under 15 around 2010. Thailand reached the same point in the mid-2010s. Vietnam is projected to follow by around 2035, according to the UN. A considerable increase in the number of elderly people places additional strain on healthcare services and the state, which must cover pension payments and other forms of relief. That is especially concerning in Vietnam, where pension and social-insurance coverage remains uneven, particularly among the country's large informal workforce. Thailand's experience shows that higher income levels do not eliminate these challenges. Its welfare system, healthcare sector and labor market are already adjusting to a shrinking workforce and a rapidly growing elderly population. Aging trends vary across Southeast Asia, creating both challenges and opportunities. Thailand has long depended on migrant workers from neighboring Cambodia, Laos and Myanmar, where working-age populations are expected to grow or remain static by 2050. Migration can help ease labor shortages in sectors such as construction, agriculture, manufacturing and care work, though it also requires governments to strengthen migrant rights and access to services.
The BriefWire