Live long, prosper, and multiply?

The consequences of China’s One Child Policy

Heather Booth
Kim Xu

Government and governance, Social policy, Arts, culture & society | Asia, East Asia

22 April 2016

The relaxation of China’s One Child Policy in 2015 was in response to the problems posed by both population ageing and the growing number of men with no prospect of marriage. In the first of two complementary articles, Heather Booth and Kim Xu consider the likely effects of this policy change for the Chinese population.

The Chinese blessing of a long life is increasingly coming true. But not, perhaps, as always imagined. The problems of an ageing population in China are becoming more acute, hence the recent relaxation of the 1979 One Child Policy, allowing families to have two children after being restricted to one for more than three decades. What effect is this likely to have?

Population planning is a long-term endeavour. Increased fertility rates would certainly change the proportions of the population pyramid and delay the onset of population decline. But will the change of policy actually effect an increase in fertility? It seems doubtful, for two reasons. First, it is questionable in the 21st Century whether China’s level of fertility is maintained by the One Child Policy or a response to socio-economic development.

Second, the one-child family has become the norm. Chinese family size is remarkably uniform compared with other low-fertility populations where childlessness is more common and family sizes can be quite large. Changing the one-child norm will not be as simple as changing the One Child Policy.

Whatever the level of fertility in the coming decades, the old age population of China will inevitably grow both in absolute numbers and in relation to their main source of direct and indirect support, the working age population. The relatively large current working age generation will become the old-age generation, only to be replaced by the much smaller current younger generation. Thus, the challenges of population ageing – notably the provision of old-age social security and aged care – will deepen.

In traditional societies the family is often the sole source of support in old age. The traditional system of social security is institutionalised in the intergenerational contract – successive generations provide for their parents and are in turn provided for by their children – and operationalised through the multi-generation household. With the advent of low fertility and population ageing, the viability of the intergenerational contract is brought into question as there are fewer family members to support each elder. In China, the ‘4-2-1’ problem arises because the only child is responsible for supporting two parents and four grandparents.

The challenges of this new demographic balance are compounded by social and economic change – including better education, increased formal employment, labour migration and urbanisation – and the impact on the lifestyles of the working generation. The new economic order is incompatible with the time and proximity demands of family-based aged care, especially of the frail elderly, and with the traditional role of the daughter-in-law as domestic worker and carer.

Despite the pressures of the modern economy on the working generation, the intergenerational contract is largely maintained through the adaptation of filial responsibilities. While co-residence in the multi-generation household is becoming less common, support for parents is maintained through migrant remittances and private transfers and gifts, and in some cases by employing a person to provide home help and care. The skipped-generation household, comprising an elder and their grandchild(ren) – also a form of adaptation – has been found to be beneficial for the financial security and well-being of Chinese elders. Further, in the face of the smaller family, possibly without a son, filial responsibilities are increasingly borne by a daughter, especially parental healthcare. Such adaptations are generally initiated by the working generation, but they involve a change in attitudes of the older generation. Changing attitudes are crucial to accepting residential aged care.

The Chinese response to population ageing also involves the recent expansion of social security systems. China introduced Basic Pension Insurance as early as 1951. Initially covering state and urban collective sectors, it has been extended to urban private enterprises. However, only 30 per cent of migrant workers have social insurance, due to eligibility criteria being based on the Hukou system and difficulties in inter-provincial transfers. The Five Guarantee System, introduced in 1956, continues to provide a social safety net.

In 2009, the new voluntary Rural Pension scheme was introduced. Being financed primarily through personal accounts and incentivised by state subsidies, this innovative system combines family support and state social security regulation. While members qualify for a full pension by contributing for at least 15 years, those aged 65 or older who have not had the opportunity to fulfil this condition receive the basic pension if a family member participates in the scheme. In time, most members will satisfy the 15-year condition, but this family-determined safety net will remain. This scheme assures income security in old age while enabling the rural poor to meet their filial responsibilities, fulfilling not only cultural but also legal obligations to provide for the older generation.

Population ageing and old-age social security are an integral part of wider social and economic development. While development has enabled the expansion of formal social security systems, these are largely financed through the contributions and taxation of the working generation. In this way, the intergenerational contract is changing, with the working generation bearing the burden of bridging old and new in providing for both the current old-age generation through taxation and private transfers, and their own generation through pension schemes. The new Two Child Policy would add to this burden. Indeed, with the change of policy, some older family members are pressuring young parents to have a second child, especially if the first child is a girl.

The two solutions to population ageing – expanded social security and increased family size – would impose a heavy burden on the working generation, particularly as this generation can expect to live longer in retirement. At both the individual and state level, prosperity will be a precondition for both solutions.

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Citation

Booth, H. and Xu, K. (2016). Live long, prosper, and multiply? - Policy Forum. [online] Policy Forum. Available at: http://www.policyforum.net/live-long-prosper-multiply/

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