In the book Gray Dawn: How the Coming Age Wave will Transform America -- and the World, the author Peter G. Peterson offers several feasible strategies to solve problems caused by an aging population and decreased fertility. They are as follows: First is encouraging longer working lives; second is increasing the labor participation rate; third is giving birth to and raising more productive children; fourth is emphasizing the obligation of filial affection; fifth is granting subsidies to elderly people based on their basic needs; sixth is requiring people to save money for their own retirement; seventh is facing the problems now before they are too late.
According to the latest information, we can be sure that the fertility rate is declining faster than previously thought by the government. And the advances in medical technology and welfare systems brought about by institutions like the National Health Insurance (NHI) and the Elderly Welfare Subsidy can contribute to a longer average life expectancy than previously predicted. Because the decrease in the fertility rate has a much greater impact than the increase in life expectancy, we anticipate that Taiwan's population will stop growing within 10 years. As a consequence, the overall economy will suffer.
In general, the public does not yet seem to realize the danger posed by a decrease in the percentage of young people, and this raises concern about the fate of our country. Because the growing number of senior citizens represents a big chunk of voters, some politicians naturally advocate many social policies specifically geared toward the elderly. This structure has deprived young people of many rights and benefits. In the future, social welfare policies will incline even more toward senior citizens, making the phenomenon of a diminishing younger population even more troublesome.
The government should take the following measures immediately if it is to avert the impending age structure crisis:
First, include infertility treatment in the NHI coverage, which can be restricted to NT$100,000 for each woman in the primary stage.
Second, double subsidies for child-bearing women with military, civil service and teachers' insurance, or who belong to the Labor Insurance and Farmers' Health Insurance programs. The burden of the first two measures will be borne by everyone insured; thus, the premium may vary when necessary. Because social insurance programs have cross-generational benefits, raising more productive children will help the government to meet its long-term goal in social insurance management.
Third, children from middle- to low-income families should be aided by reimbursing their education fees, including lunch fees and NHI premium, just like the benefits given to military personnel, civil servants and teachers. In 1981, a total of 410,000 live births were recorded, and by last year this figure had dwindled to 220,000. Thus, the Ministry of Education should be able to redistribute its funds to education subsidies. This should help to narrow the gap between rich and poor, promote civil rights and social justice and improve social mobility.
Fourth, increase dependents' exemption in the income tax system, as well as benefits for people with a child younger than 10, similar to the system currently in place for people 70 and over. An increased allocation from NT$70,000 to NT$110,000 can be covered by an increase in business tax.
Fifth, implement a subsidy program for children from low-income families.
The first and the third measures are categorized as financial support, and will provide immediate assistance to parents in educating and raising children, who are the direct beneficiaries. Parents will not be able to spend this money for other purposes. The second and fourth measures are meant to correct the welfare slant in favor of the elderly, and these measures can increase young people's willingness to have children.
Owing to the shift in population structure, I sincerely urge the government and every political party to bear the notion of welfare for all in mind, instead of unnecessarily adding more benefits for the already welfare-saturated elderly. If the budget allows, the government should start giving a monthly stipend of NT$3,000 to each child from a low-income family, as long as the family has assets of less than NT$5 million and earns less than NT$500,000 annually.
The government can ensure that parents use the money to educate and nurture their children. Because the birth rate declines annually, and the number of elderly people increases sharply, I estimate that the total amount of money spent on subsidies for children from low-income families will be far less than that spent on the low-income elderly.
Children are our future leaders, and they will take over the debt of the current government. By helping poor children and providing them with a proper education, our country's productivity will not only increase, but we will also increase our future leaders' ability to take care of the aged and bear the enormous weight of the national debt. Only in this fashion can we meet the principle of equal sharing in a cross-generational way.
Chung Chun-wen is an associate professor of international business at Soochow University.
TRANSLATED BY LIN YA-TI
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