Singapore is overhauling its groundbreaking baby bonus program, first introduced in 2001, as the city’s fertility rate and number of births fall to record lows.
In 2025, birth rates in the Southeast Asian country fell below 30,000 for the first time in post-independence history, while the birth rate fell to just 0.87 per woman, a record low. That’s a dangerous prospect for any country, but especially for Singapore, which is crammed into an area smaller than New York City.
“The country does not have the natural resources to cover the costs of supporting an elderly community, including care and medical expenses,” explains Tan Poh Lin, a research fellow at the Institute for Policy Studies at the National University of Singapore (NUS). In his view, immigration will not be enough to solve the problem: “Increasing the birth rate is crucial to slowing the pace of change and allowing society to adapt both economically and institutionally.”
At the country’s National Day rally on August 23, Prime Minister Lawrence Wong unveiled the SG Child Support Package, which includes measures such as expanded childcare leave, strong financial support for parents, more affordable childcare options and additional opportunities for subsidized housing. In total, the support until a child turns 17 is almost 70,000 Singapore dollars (US$55,000).
Demographics experts are cautiously optimistic about the new system, which appears to provide more sustainable and holistic support for families.
“Singapore’s family policy had become increasingly complicated Benefits vary by birth order and by system” says Bussarawan Teerawichitchainan, a social demographer and sociologist from the NUS. With the new package, “support will be more clearly tied to each child and provided over a longer period of childhood, rather than focusing primarily on birth.”
But previous measures to give parents more money, both in Singapore and elsewhere in Asia, have failed to reverse falling birth rates.
“Singapore has gradually expanded financial support for marriage and parenthood over many years, but fertility has continued to decline,” admits Teerawichitchainan. “The concerns expressed by parents are increasingly not just about money, but also time, work and family pressures, childcare, housing and other demands associated with raising children.”
Economic Impact of Low Birth Rates
Persistently low birth rates could threaten a country’s ability to achieve this sustain its economy. “Smaller younger cohorts are entering the workforce while the older population continues to grow… leading to greater pressure on labor supply and the tax base over time,” says Chua Yeow Hwee, an economist at Nanyang Technological University (NTU) in Singapore. “For companies, an aging and shrinking workforce also tightens work restrictions.”
Singapore has long relied on foreign workers to make up for domestic labor shortages. In 2025, there will be nearly 1.6 million foreign workers living in Singapore, accounting for 40% of the country’s total workforce. the highest in Asia outside Middle Eastern countries, according to the Migration Policy Institute, a US think tank.
The country is also pinning its hopes on automation, and the government is committed to it 1 billion Singapore dollars (US$787 million) for public AI research from 2026 to 2030.
“The relationship between demographics and economic growth is complicated,” explains Teerawichitchainan. “Economies can adapt through productivity growth, technology, longer and healthier working lives, higher labor force participation and immigration.”
The role of companies
Singapore’s new program shifts from simply encouraging births to a focus on the long-term well-being of the family, which could help change potential parents’ attitudes toward children.
“Cash gifts have a positive effect on births, but the effect is usually short-lived as many beneficiaries do not increase their final family size,” explains Tan from NUS. “Measurable change can only be achieved by adjusting expectations of parents, including the idea that parenting involves sacrificing personal well-being.”
Part of the responsibility for changing these expectations lies with companies. “There is a limit to what government policy can do directly, and employers have an important role to play,” Chua says. “A generous vacation entitlement is less valuable if employees believe that taking it will make them appear less committed or hinder their development.” (Singaporeans receive 16 weeks of paid maternity leave and four weeks of paternity leave, as well as 10 weeks of parental leave, which is shared by both parents and must be taken within one year of birth.)
But there may be little anyone — government or corporations — can do to convince people to have children amid greater economic uncertainty.
“Today, people only have children if they are confident that they can ease their children’s path forward and give them access to a good life in the future,” says Tan Ern Ser, an associate research fellow at the Lee Kuan Yew School of Public Policy in Singapore. “Unfortunately, despite the government’s tireless efforts, the world we live in today does not leave much room for optimism.”
The Singapore government also recognizes that its ability to encourage the population to have children is limited. “The decision to have children is a deeply personal choice. Policies alone cannot achieve this,” Wong, Singapore’s prime minister, said during his speech. “But what we can do is make it easier for Singaporeans who want children to start and raise a family.”
Ultimately, Singapore may just have to accept that it will have to live with fewer people.
“The economic challenge is not simply to restore a certain level of fertility,” concludes Teerawichitchainan. “It is also about building institutions, labor markets and technologies that enable Singapore to thrive in a demographic reality that may continue to be characterized by low fertility and population aging.”