It would slow the world's aging, but can you really make people have more kids?

08/13/2009 10:30 am EST

Focus: STOCKS

Jim Jubak

Founder and Editor, JubakPicks.com

I'm pretty sure that Shanghai's plan won't work. Weighed up against the forces pushing couples toward having kids later and then having fewer of them, the government's incentives are just too small.

In Japan cash talks. And loudly. The Democratic Party of Japan, with a real chance to win power in the country's August 30 elections, has proposed a subsidy of 26,000 yen a month (that's about $270) per child and to make public high school free. (I did mention that there's an election, didn't I?) Will that be enough to overcome the country's tradition of long working hours and minimal child care?

About 21% of Shanghai's population are 60 or older. That's roughly twice the national average. And the birth rate lags well behind the national rate of 12.14 per thousand. The birth rate is so low in Shanghai, the theory goes, because the rising incomes of China's financial capital have created a huge number of professional couples who don't see the point of slowing down their race to the top in order to have children.

Shanghai long-ago relaxed China's "one child" limit. For more than a decade 12 categories of couples have been allowed to have two children. (It's unlikely that some of these exemptions have helped much. One is for couples where one is a fisherman who has spent more than five years at sea.)

Now the city is prepared to go further. City workers will put leaflets under doors urging couples to have more children. They'll also make home visits to urge child-bearing. Shanghai officials clearly feel an advanced case of the national anxiety that China will get old before it gets rich.

But the program so far just doesn't seem like enough when you balance it against the powerful self-interest urging Just say No!.

In Japan, the ruling Liberal Democratic Party, facing a real chance of losing power in the end of August elections, has seen and then raised their opponents' bet. The party has promised to boost disposable household income, make pre-school education free, and provide a daycare slot of every child who needs one.

Accomplishing all that will be a neat trick in a country with 5% unemployment, the highest level since 2003, and a budget deficit bigger than Godzilla.

But Japan is aging faster than any other developed country. By 2015 more than a quarter of all Japanese will be over 65.

Facing with a crisis like that, what do economics and budget deficits matter?

It's only money. And besdies no one has a better idea.

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