As the world’s most populous country, it is no surprise that the cost of raising a child in China is much higher than in other developed countries. A new report cited by the South China Morning Post suggests that the average household income in China must go up about 5 percent to cover the cost of raising a child from birth to age 18. This is far above the ratio of around 3.64 times in Germany, 2.08 times in France, and 4.11 times in the U.S.
The YuWa Institute report reveals that the financial strain of childcare has impacted women’s participation in the workforce. This is because the high cost of raising a child can lead to reduced work hours and wage rates, while men’s livelihoods tend to remain relatively unaffected by parenting. As a result, 77.4 percent of Chinese women of childbearing age reported that they felt “heavy economic burdens.” It cited this as why they wanted to limit their family sizes.
With the current ultra-low fertility rate, China’s population is set to continue declining, which could have severe implications for its economy and overall national strength. To encourage couples to have more babies, the government is already giving out cash subsidies in some areas for families with more than one child.
However, critics say that the money for these schemes must cover the actual costs of raising a child in China. The Jefferies analysts note that if the government were to take over the provision of preschool services, kindergarten, and nursery schools, it could bring down the cost by a significant margin.
As a result, YuWa said there is an urgent need to introduce policies at the national level that reduce the cost of childbearing as soon as possible. This includes reducing income taxes for couples with two or more children, providing improved childcare services, allowing equal maternity and paternity leave, and making hiring foreign nannies easier. The think tank said These measures should increase the number of new births in China by three million.
Despite the considerable investment required, China’s low fertility rates will unlikely change anytime soon. This is mainly because most people living in large cities are poor, with urban residents having the lowest fertility rates of any group. This is mainly due to housing prices and the lack of good quality public services, which make it harder for young couples to start a family in these cities. But the government is still working hard to improve these issues, including providing free childcare services in some of its largest cities.
