Summary of Key Points
Vietnam and India, once large countries with populations primarily managed through birth control measures, are now turning to policies that encourage childbirth due to sustained fertility rates below the replacement level (2.1) and accelerating aging. Vietnam has introduced a new Population Law that includes extended maternity leave, increased cash subsidies, and priority access to housing to address the issue of an aging population before achieving economic prosperity. Some regions in India, such as Andhra Pradesh, also offer financial incentives for having more children. However, both countries face the same challenge: merely providing money is not enough to reverse the trend of young people opting out of having children. Deep-seated issues such as economic pressure, high living costs, and changing societal attitudes require comprehensive support to solve; otherwise, it will affect future labor supply and economic growth.
Vietnam: A 180-Degree Policy Shift from Birth Control to Encouragement
Vietnam has been implementing family planning for over 30 years (with a maximum of two children per household since 1988), but it has now completely shifted to encouraging childbirth. The new Population Law, effective in July 2026, includes the following measures:
- Doubling of Cash Subsidies: The one-time birth allowance has increased from approximately 516 yuan to 1306 yuan (equivalent to two-thirds of an average employee's monthly salary).
- Extended Maternity and Paternity Leave: The maternity leave for mothers of second children has been extended from six months to seven months, and the paternity leave has been increased from five days to ten days; an additional three days are provided for third children.
- Priority in Housing: Families with two children will be given priority when purchasing affordable housing.
Why such a rapid policy change? Vietnam is experiencing early aging: its population was 103 million in 2023, with a total fertility rate of 1.93 (below 2.1 for three consecutive years), and the population over 60 years old exceeds 10%. It is estimated that by the middle of this century, the elderly will account for 25% of the population, leading to a decline in the total population. The World Bank warns that Vietnam has less time than developed countries to adapt to aging and its demographic dividend window is narrowing.
Public reactions vary: Chen Thi Haiyen from Hanoi (expecting her second child) finds the extended maternity leave useful, but accountant Nguyen Kim Bi (with a monthly income of $1,000, spending half on childcare) says that an extra month of leave and subsidies are not enough to motivate her to have a second child—she believes high costs of raising children are the real barrier.
India: The World's Most Populous Country, but with Lower Fertility Rates in Some Regions
India is the most populous country in the world (over 1.4 billion), yet its fertility rate no longer follows the pattern of "the poorer, the more children." The national total fertility rate is 1.9, similar to Vietnam's. Even economically developed regions like Tamil Nadu (1.3) and Maharashtra (1.4) have lower rates than Finland (1.4) and Norway (1.4).
Some states are taking action to encourage childbirth: Andhra Pradesh announced in May that parents of three children will receive a reward of 2,120 yuan, and those of four children will receive 2,827 yuan. The state's fertility rate of 1.5 is still lower than the national average, due to high costs of raising children and changing family values (no longer emphasizing having many children as a sign of prosperity).
Young People Unwilling to Have Children: A Common Challenge for Both Countries
The reasons young people in Vietnam and India are reluctant to have children are similar:
- Economic Pressure: In Vietnam, Nguyen Kim Bi spends half of her income on childcare; in India, ordinary families face high costs related to education, healthcare, and housing.
- Fast Pace of Life: Young people in Ho Chi Minh City report high stress and limited social circles, making it difficult to find partners, leading to delayed marriages and fewer births.
- Changing Attitudes: Children are no longer seen as a duty; personal quality of life is more important.
UN official Phan Thi Lan emphasizes that one-time cash subsidies are ineffective; sustained support for childcare (such as affordable daycare and housing subsidies) is crucial. Otherwise, high costs of housing and childcare will continue to deter young people from having children.
The Population Problem Raises Concerns: Will Economic Growth Suffer Due to a Lack of Workers?
Population changes in both countries directly affect their economies:
- Vietnam: The country currently relies on young labor for labor-intensive industries (such as clothing and electronics), but if fertility rates continue to decline, there will be a shortage of workers, putting pressure on social security systems (pensions, healthcare).
- India: Despite its large population, some developed regions have very low fertility rates, which could lead to a lack of workers and hinder industrial development.
In short, if these countries do not address fertility issues now, their economic growth may slow down in the next twenty to thirty years due to a shortage of labor.
More Than Just Money: Comprehensive Policies Are Needed
Global experience shows that cash incentives alone are insufficient to boost fertility rates. Countries like Japan and South Korea have provided substantial subsidies with little effect on fertility rates. Both Vietnam and India need to do more:
- Reduce Childcare Costs: For example, Vietnam can build more affordable daycare centers, and India can subsidize education expenses.
- Improve Housing Conditions: Vietnam's policy of prioritizing housing for families with two children is a good start, but more affordable housing is needed.
- Change Social Attitudes: Encourage greater male participation in childcare (such as extending paternity leave) and reduce gender discrimination in the workplace.
In summary, solving fertility issues requires a multifaceted approach involving economic, social, and cultural factors to encourage young people to have and feel comfortable having children.
This analysis explains the population policies of Vietnam and India, the underlying reasons, and the challenges they face in plain language, making it easy for readers outside the financial and business fields to understand.