The Lasting Impacts of China’s One-Child Policy on the Chinese Economy

“China is facing the problem of becoming gray before it becomes rich,” claims Jacques deLisle, University of Pennsylvania law professor and director of the university’s Center for East Asian Studies. In China, from 1980 – 2015, the One-Child Policy permitted families to only have one child. As a result of this policy, China now has an aging population and low total fertility rate. These conditions have begun to wreak havoc on the Chinese workforce and economy.

As of 2021, citizens of China are permitted to have three children. However, most people are having less than the permitted amount. In 2019, under the Two-Child Policy, the total fertility rate according to the World Bank was 1.696. This statistic denotes the average number of births per woman. Therefore, even under the Two-Child Policy, many families were not having two children. This lack of births poses a large issue for China as the country is attempting to increase its population and remedy the effects of the One-Child Policy.

A 1.696 total fertility rate does not meet the replacement level fertility rate of 2.1 births per woman, which means the population of China is ultimately decreasing. The lack of births is partially due to the cost of housing, as parents typically buy their children homes. The cost of buying homes for two or three children is simply unattainable for the average Chinese family. Thus, it is not financially feasible for Chinese families to have more than one or two children.

Additionally, I suspect there is vast uncertainty among Chinese families who are told to have more than one child. For decades, there was extensive propaganda imposed upon China’s citizens stating the benefits of having a single child. Extensive murals and signage dedicated to family planning and the benefits of population control were prevalent in Chinese communities. Now, the government is going back on those statements and values that have been long ingrained in the minds of many. This stark change is sure to cause some distrust in the validity of the new Three-Child Policy.

This family planning billboard states, “Humans have only one earth, we must control population growth!”

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Today, China has an aging population. Due to the lack of births, the labor force is quickly growing old without many younger workers to step in. A look at China’s population pyramid shows the largest age cohorts at the top with the smaller ones at the bottom, suggesting a population predominantly comprised of older individuals. I predict these disparities will only grow larger as the current population continues to age and birth rates continue to be low. This will cause the dependency ratio to increase. Thus, society will need to provide money for the costs that come with aging and retired family members, such as medical bills and housing arrangements. Yet, this money is difficult to provide without young family members available to enter the workforce.

China’s Population Pyramid in 2019.

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To combat this issue, I believe young workers can be encouraged to enter the workforce via monetary sign-on bonuses. This would give young workers an instant boost in income and incentivize them to start their careers earlier. Additionally, if all jobs were to provide health care benefits for their workers’ aging family members and young children, people would spend less money on care for their elderly family members and be more willing to have children.

Furthermore, China could provide monetary subsidies for families with children. This would incentivize people to have more children whilst making it financially feasible. The government could also work with businesses to create a plan for mothers to take paid maternity leave with the promise of returning to their previously held position at their workplace, as many mothers are reluctant to take time off to have children out of fear of losing their current employment status. Additionally, businesses could change employee evaluation tactics to measure in terms of goals reached rather than hours worked. This would allow new parents to have more flexibility in their work schedules. Hence, they would be more willing to have children.

Therefore, there are many ways to encourage citizens of China to have larger families. However, the government must understand the issue of increasing population does not lie in the amount of children a family is permitted to have, rather, it is a deeply rooted socioeconomic issue that must take a large amount of understanding and compromise on their behalf.


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