The island nation of Taiwan has a population of 24 million, about half that of Spain and equal to that of Florida. Depending on who is reporting, the total fertility rate (TFR) in Taiwan ranges from 0.87 to 1.2. A TFR of 2.1 reflects the replacement rate for a country–that is, the number of births needed to maintain a country’s population. Taiwan has one of the lowest fertility rates in the world.

In the past decade, the government has taken active steps to reverse Taiwan’s low fertility rate. If it is unsuccessful, Taiwan will face a shrinking workforce and an aging population, which means less state revenue from taxes and more money spent on elderly care. A decreasing population also becomes a significant security issue with fewer people able to defend the country and keep the economy robust.

Over the past decade, the Kuomintang and the Democratic Progressive Party administrations implemented and expanded several policies to support working mothers. Here is a chronology of what a working mother has access to:

• IVF. If she needs IVF treatment, the government will subsidize the first treatment at NT$100,000 (~$3,000, or about 1/2 to a 1/3 of the cost) and NT$60,000 (~$2,000) for the 2nd to the 6th treatment.
• Pregnancy checkups. She can receive 7 days of paid leave for pregnancy checkups.
• Birth bonus. Local governments give different amounts. If a mother gives birth in Taipei, she receives NT$40,000 ($1,250) as a birth bonus.
• Maternity/paternity leave. The mother gets 8 weeks of paid leave. The father gets 7 days of paid leave, which he can also apply to pregnancy checkups.
• Parental leave. Either the mother or father can get 6 months parental leave at 80% pay.
• Care subsidies. The baby will get a monthly subsidy depending on who cares for him or her.
  • If a parent stays at home, the subsidy is NT$5,000/month (~$150) until the age of 6.
  • If a nanny (baomu) takes care of the child, whether in the child’s home or in her own home, or if the child is in a quasi-public daycare, the subsidy is NT$8,500 (~$265).
  • If the child is in a public daycare, the family gets $5,500/month (~$170).

The above list seems quite generous…and yet, women in Taiwan are not increasing their rate of having more babies.

On January 13, 2024, citizens will decide the next president of Taiwan. What are presidential candidates advocating? Let’s look at each one in turn:

LAI-CHING-TE of the DPP promises the world by advocating a mix of subsidies and strengthening the public care system for ages 0 to 22. They include:

• Child subsidies
  • Public daycares–increase from NT$5,500 to NT$7,000/month
  • Quasi public daycares and nanny services–increase from NT$8,500 to NT$13,000/month
• Care system
  • Longer daycare hours to align with working parents’ hours
  • Promote care services over winter and summer school vacation
  • Raise salaries of daycare workers and guarantee yearly salary raises based on seniority
  • Lower the teacher-student ratio.
  • Make parental leave more flexible
  • Encourage companies to open daycares

Lai Ching-te has additional ideas for the 6–18 and 18–22 category, which I won’t go into.

HOU YOU-IH of the Kuomintang proposes the following:

• Provide NT$20,000 subsidy for freezing eggs; NT$2,000/year for storing the eggs for up to five years.
• Raise the parental leave from 80% of salary to full salary
• Make public childcare for children between 0 and 6 free
• Raise subsidies for private childcare to NT$10,000/month
• Check this one out: Give NT$1 million ($31,000) housing subsidy for families with three or more children.

KE WEN-JE of the Taiwan’s People’s Party suggests:

• Give NT$50,000 to pregnant women at 3 months.
• Then give NT$100,000 once the baby is born
• Double the maternity paid leave to 14 weeks

Given this dizzying array of proposals, will it actually solve the low fertility issue? Let me chew on this for the next post.

In the meantime, let me end with this. Taiwan’s welfare regime is truly a hybrid system between the US (a liberal democracy) and Spain (a social democracy). There are social democratic elements in Taiwan’s proposals (it already has universal health care and proposals to strengthen public daycares are a step in this direction) but there are also liberal elements in the proposal (e.g., providing cash transfers to allow families to decide how they will use the money). The question is whether this hybrid approach is truly the best of both worlds or whether it falls short by failing to pursue one path fully.

Update 2/6/24

The writer in the comments section below refers to an Op Ed piece I wrote for the Taipei Times and which builds from the above post. You can find it here: Can Lai Solve the Low Birthrate?