03 April 2015

Critical Thinking on Singapore Fertility 2 - It is more than Economics

We over-simplify an issue, such as fertility rate, to one factor, the economic $, and then wonder why our baby bonus program is not effective. It is important that we take a system approach, understanding the values, and all other factors, and systematically compute to come out with better proposals - not just one, but many that complement one another running concurrently.
A friend email me the following link https://sg.finance.yahoo.com/news/why-isn-t-baby-bonus-160000923.html. If you read the post and the subsequent comments, and the government that come out with policy hoping to increase the fertility rate, have all reduced the issue into a economic one. Give me more subsidies, reduce the cost of living, give me work life balance etc and I will produce more babies?

If we look at the chart Fertility rate - Wikipedia or do a quick run through at Country Comparison :: Total fertility rate - The World Factbook, without going through a more rigorous analysis of fertility-rate vs Per-capita GDP, we can easily conclude that the richer the countries, the lower the fertility rate! If you believe this is true, then we should go for a recession to increase fertility rate. (See Fooling Ourselves and Others with Stats - Fertility Rate vs Home Prices).

A popular subject being taught in the university is Behavioral Economics. It reminds us that our decision making is more than just dollars and cents. There are psychological, social, cognitive, and emotional factors involved. In fact, I strongly believe that the fertility rate issue has a lot to do with our values. Our values about what is a meaningful life and about posterity. Chinese in the past, and even recent past, despite their poverty, tend to have large families, even of 10 and more that are not infrequent. Why? Because one the Chinese value is “不孝有三,无后为大”《孟子·离娄上》, Not having any baby is the greatest sin of the three sins of filial piety.  But the values of our present post modern society is Me'ism first. Our pleasures and our careers come first in live. Making more money, as status, as pleasure, as whatever, is more important. Seeing every problem as a money problem is the result of such money centric mindset that we now possess. Of course, not everyone think like that, so we still have people having babies for other meaningful reasons besides economics.

What I am more concern is the mindset that lead to single factor analysis of any problem.  We tend to over simplify problems and wonder why we are over-simplified proposal does not work. Is this simplicity caused by the Internet instant response and group-think? We need to go back to the basic and learn to look at a problem with the system mindset and think systematically. We need to go back to some philosophies and rethink our values.  For me, I am more familiar with Ancient Chinese Wisdom and Chinese Classics and the Bible and offer them as possible starting points. If you like Sun Zi's Art of War, then perhaps, you can find a good summary in The Real Master of Sun Zi's Art of War. But the keys are to find our values, discover all the factors or forces involved, and then know how to calculate rightly to get the right solution.

Coming back, giving baby bonuses, reducing the costs of living (or increasing the salary with productivity) , making it convenient and low costs for baby and child care are all good things to do. But they are not the main motivators for having babies. We must make changes to the values, the society structure, and supported by the economic incentives and even political and legal factors, can we tend have some influence on the fertility-rate.  We must look at an issue more as complex system of interacting factors and not to over-simplify them. It is not easy to solve but the rewards for solving is great.

Lim Liat (c) 3 April 2015

See also: Critical Thinking on Singapore Fertility 1 - Is it a problem?

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