Like many nations across the globe, Singapore’s birth rate has been falling for some time. It’s nothing new. What is new is the record low in Singapore last year.
The overall fertility rate fell to 0.97 in 2023—roughly half of what it was in the late ’80s. That means, on average, people are having less than one child during their entire reproductive years.
While Singaporean birth rates have slowly declined over the past few decades, this is the first time they’ve fallen below 1.0. That’s bad news for Singapore’s economic future. At the same time, it stems from a much larger issue under the surface that may not get as much attention as it should.
Most developed nations need a total fertility rate (TFR) of around 2.1 to grow their population. Anything less than that means a likely decline in the future. That’s also a figure Singapore and several other Asian countries have struggled to reach in recent years.
Singapore’s rapid TFR decline began in the ’80s. Since then, it’s been falling almost every year. The only noticeable spikes have been in 1988, 2000 and 2012. That’s not necessarily surprising, considering each of those years was a Year of the Dragon.
Interestingly, the TFR isn’t the only birth-related factor that’s changed in that time. People are also giving birth later in life. In 1980, women aged 25 to 29 had the highest fertility rate by far. Today, that honour belongs to the 30 to 34 age group. Even women aged 35 to 39 have higher birth rates than women in their 20s.
That trend suggests Singapore’s TFR may fall even further in the future. Other countries also struggle with falling birth rates, but in some of those, older women’s fertility rates are increasing, offsetting some of the decline in younger women. That’s not the case in Singapore, which could mean a faster fall than most.
At this point, you might be asking, “So? Who cares?” Sure, a declining population sounds bad, but people should have the right not to have children if they choose. You can’t force people to have kids—nor should you—but population decline can seriously affect the economy.
Think of it in terms of taxes. Fewer births now means fewer adults paying taxes later on. Singapore may struggle to fund some programmes if that gap grows wide enough. That could mean less investment in public infrastructure, a smaller police force, or diminished monetary support for growing businesses and social services.
Taxes aside, a drop in the birth rate leads to a smaller workforce. Fewer people contributing to the economy will make it harder for businesses to grow. It could also place more pressure on workers, as fewer people will have to do the same work that a larger workforce once did. That’s a recipe for stress.
All this would be a challenge for any country, but Singapore is in a uniquely vulnerable position. The nation has one of the fastest-growing GDPs in the world. That—combined with an already-present labour shortage—means a steep workforce decline could create massive disruptions as the economy has to slam the brakes.
How did this happen? As with most things of this nature, it’s a complicated issue.
The easiest answer is that culture is changing. Newer generations aren’t having as many children because they don’t want kids. The traditional family dynamic isn’t as popular as it once was, so there’s less societal pressure to have lots of children.
A competitive job market could also be part of the problem. Making it big in your career is a big deal. Unlike in the past, that applies to both men and women today. Consequently, you’ll see more women putting motherhood aside to pursue their careers first. It’s hard to surge ahead of the competition when you’re out of the game for several months looking after a newborn.
Along similar lines, many young Singaporeans are getting married later in life to pursue a better education or career first. Just 10 years ago, only 27.3 per cent of Singaporeans 25 or older had a university degree. Today, 36.6 per cent do.
That’s certainly not a problem—in fact, it’s great—but this shift does mean people are getting married later or not at all. In turn, fewer individuals have children and those who may want kids have a smaller window of opportunity.
All these factors contribute to Singapore’s declining birth rate, but there’s something bigger at play. Perhaps the most significant underlying issue—and the most problematic—is that having kids is expensive. Living in Singapore is also costly. As those trends grow, fewer people can afford to plan a family.
Singapore isn’t just pricey. It’s the most expensive place to live in the world. It has been for nine of the past 11 years. The economy may be booming, but that can be a double-edged sword, as rents, utilities and household goods keep getting costlier.
Raising a kid in any context can be expensive. Those added childcare expenses on top of an already staggering cost of living can be the final straw for many families. Even if some couples can afford it, the prospect may be too intimidating to take the financial risk.
It’s worth noting that child-related costs go beyond buying diapers and paying for more food. You may also want a bigger space, especially if you plan on having more than one kid. That means higher rent or buying a house. You may need to take time off work. Can you afford to do that if your company doesn’t offer paid parental leave?
The COVID-19 pandemic made this already growing problem more extreme. It paused new construction, leading to uneven housing supply and demand to create skyrocketing home costs. It led to rising prices as many businesses had to adapt to stay afloat. Inflation has cooled a bit, but it’s still high.
What happens now? Some government officials seem to think throwing money at the issue will make it disappear. That includes raising the Baby Bonus Cash Gift to up to SGD13,000 and increasing the Housing Grant for first-time families. Government-paid paternal leave is also doubling to four weeks.
These efforts make raising a family more affordable. That’s a step in the right direction. However, these are tax-funded programmes. Lower tax revenue from a declining population could jeopardise the future of this funding. In a way, the problem has gotten big enough that it’s counteracting the most straightforward solution.
Singapore will have to tackle the overall cost of living, not just the cost of parenthood, to treat the disease and not the symptoms. Considering how tax-funded programmes may be of limited help in the future, the government may need to look for other solutions than cash gifts.
Promoting fairer markets by busting effective monopolies and lowering the barrier to entry in some industries can foster local competition. This could lead to price decreases on many goods and stimulate the domestic economy while reducing reliance on outside sources.
Price caps and fairer workplace practices may also help. It’s a tricky situation, though. Making a country more affordable while supporting countrywide business growth is challenging. Cultural shifts may be needed to help people overcome fears over economic risks and child-raising.
SINGAPORE NEEDS TO ADDRESS AFFORDABILITY to fix its declining birth rate, which is emblematic of a much bigger problem. To fix the declining population, the nation must first repair its economy—not for the big businesses but for the middle- and low-income families.
Thinking of the birth rate solely in terms of family dynamics is missing the big picture. There are larger things at play. Only when people recognise that, would it be possible to move forward.
