Singapore is preparing for its next transition to become a First World global city, vibrant and endearing as a home. On this journey, Singaporeans have been exhorted to embrace a mindset shift in many walks of life - above all, in the economy.
They know there is a need to increase productivity, invest in advanced skills training, move from rote learning and exam obsession towards flexibility, diversity and creativity in education, shift from value-adding to value-creating activities, take risks and venture out to other countries, embrace entrepreneurship and innovation, and tolerate failure as a necessary concomitant of these pursuits.
All these mindset shifts are necessary for Singapore to progress to the next level of development as a mature, high-income, high-cost, land- and labour-constrained economy subject to intensifying global competition and technological disruption.
Less attention has been paid, we feel, to the necessary social correlates and underpinnings of such aspirational economic dynamism. Social values and behaviour commensurate with a First World society are not just means to becoming a successful First World economy, they are ends in themselves. They too require major mindset shifts in both public and private domains. If not, the caring and inclusive society we want as a First World nation will only be incompletely achieved.
WOMEN AT WORK
Take, for example, the role of women in the family, society and economy.
In developing countries, gender equality is highly correlated with strong economic growth and rising incomes because it maximises the economic returns from full utilisation of scarce labour and talent, while providing countries with a demographic dividend of high savings and investment that results from low dependency ratios. Gender equality today is regarded as "smart economics".
But First World countries also recognise gender equality as a value and desired goal in its own right, with Japan a notable exception, to its own economic detriment.
Singapore has done very well in many respects, especially in equalising the educational outcomes, starting salaries and labour force participation rates of young male and female citizens. But after age 30, women's labour force participation rates fall continuously, without rising in their late 30s and 40s as in other First World countries, where many women return to paid employment after raising children. Among other small countries at the same income level (Denmark, Norway, Sweden and Switzerland), more than 85 per cent of women aged 45-49 are in the labour force, compared with only 75 per cent of women in Singapore.
As a result, Singapore's female labour force participation rate of 58.6 per cent in 2014 was lower than in most other First World countries at similar income levels, such as Denmark (75 per cent), Norway (75.9 per cent), Sweden (79.3 per cent), Switzerland (79 per cent), and the 62.8 per cent average of the Organisation for Economic Cooperation and Development (which includes large, lower-income, higher-fertility countries like Mexico and Turkey). This is so even though Singaporeans have fewer children and rely more heavily on live-in foreign domestic helpers.
This lower labour force participation rate, coupled with lower earnings than men in nearly all occupational groups, means that women have lower lifetime earnings and Central Provident Fund (CPF) accumulations than men, though they have longer life expectancy, as in other countries. This puts them at greater risk of poverty in old age, especially in the event of spousal or family abandonment. For those over the age of 60, the average female CPF balance is just 69 per cent of the average male balance, while for those between 55 and 60, it is 84 per cent. A recent study by Assistant Professor Ng Kok Hoe for the Tsao Foundation estimates that in 2011, 65 per cent of women over age 65 were poor, compared with 48 per cent of men.
Women are, in effect, penalised for societal values and behaviours that assign to them disproportionate responsibility for family caregiving - for children, the disabled and elderly. The assumption of employers, co-workers and Government that it is women who will bear this role results in discriminatory treatment in hiring, promotion, training and salaries. For example, where maternity leave exceeds paternity leave, as is still the case in Singapore today, employers may prefer to hire or promote a man rather than a woman since the latter will cost more. Such discrimination in turn makes it financially rational for families to "choose" to surrender women's (lower) incomes for caregiving purposes, thus reinforcing gender income inequality.
Underlying this unequal gender division of labour within the family are so-called "traditional values" which define unpaid caregiving and housework as "women's work". This is not something "Asian", as it is typical of most agrarian and early industrial societies in human history. But in nearly all societies, gender gaps narrow (they do not disappear completely) with further economic development, education and affluence. Government policy and family and social values increasingly favour gender equality, given its economic rationality and the belief that it is "the right thing to do" to value both males and females equally, whether in the market or in the home. Innovation - or doing things differently - is also arguably incompatible with rigid adherence to conservative traditional values and gender roles. In fact, men and society as a whole benefit from more gender-equal norms.
SLOW CHANGE HERE
This evolution from patriarchal "traditional values" to a familial and societal norm of gender equality has taken longer in Singapore than other First World nations, perhaps because rapid economic growth outpaced social and cultural change, which tend to progress more slowly. Extended access to low-wage foreign female domestic labour, at least for families in the top quintile of the income distribution, also arguably helped preserve traditional family social relations, reducing the necessity for husbands, fathers and sons to pitch in with housework and caregiving.
Government policy with implications for gender roles has also been slow to change. For example, it was only in 2002 that the quota limiting women medical students was abolished, only in 2005 that married women civil servants received the same dependant healthcare benefit as men did, and only in 2013 that paternity leave was instituted, and then only for a week, despite decades of advocacy by women's rights groups. Anecdotally it is still more difficult for the foreign spouses of female citizens than of male citizens to obtain residency and employment rights.
In almost every occupational and professional sphere, women are under-represented in leadership ranks, not only relative to their overall numbers and qualifications, but also compared with other First World countries. Thus women comprise only 9 per cent of corporate board members, and only one of 20 Cabinet ministers - both below the averages in other First World and even some Third World countries.
The lack of government and business initiatives to promote gender equality is particularly striking, given the economic need for higher female labour force participation and higher fertility, evidence from other First World countries that these two variables are positively correlated and can be increased by government policy, and the Government's strong fiscal position. Government social policies themselves still reflect an aversion to collective rather than individual solutions, by assigning responsibility for caregiving to families (and hence women), who are thus forced into lower workforce participation and lifetime incomes. The much smaller family size prevailing today also increases the care burden for individuals.
Recent policy enhancements, such as increased housing, healthcare, childcare, eldercare and disability subsidies, while welcome, are inadequate. For example, ElderShield insurance payouts for severely disabled elderly adults are too small (at $400 a month) to cover the full cost of care and are limited to a maximum of 72 months rather than calibrated to need. Rather than function as social insurance, ElderShield premiums are set using commercial insurance principles, resulting in women paying higher premiums, given their greater longevity.
To reach First World standards, a mindset shift is required with respect not only to gender roles, but also inclusion of the elderly, the disabled, the mentally disadvantaged, and other vulnerable groups into the labour force and society. In each case, accommodative rather than discriminatory policies and business practices benefit the economy by increasing employment - both of vulnerable groups and of female family members who would otherwise have to leave the labour force to care for them. Lifetime incomes of both increase, while their need to rely on public social subsidy payments (welfare or handouts) decreases. Relief from caregiving may also encourage and enable families to have more children.
Equally important, we know that work contributes to individuals' health and well-being, including a sense of dignity, pride and self-worth, which are valuable in their own right. Those unable to work under any circumstances deserve social protection and support (including financial support) as a basic individual human right, not as a supplicant recipient of charity, and regardless of family circumstances.
As the experience of other First World societies shows, caring and inclusion, facilitated by enlightened public policy, are possible. Singapore has started in this direction, and we fortunately have the fiscal and technical resources to go further, and to encourage and incentivise supportive private-sector practices.
GROW SOCIAL PROTECTION
While Singapore currently runs a primary Budget deficit, this comes after decades of very large (5 per cent of gross domestic product) surpluses, accumulated for just such a purpose, and does not capture the increased importance of unconventional off-Budget revenue sources. Public spending at 20 per cent of GDP is half that of most developed countries and lower than in our first three decades, when our income was much lower.
Public social protection expenditure was just 2.8 per cent of GDP in 2011, compared with 20 to 30 per cent in other high-income economies with relatively robust fiscal positions (like Denmark, Germany, the Netherlands, Norway and Sweden), and with Taiwan (9.7 per cent), South Korea (9.3 per cent) and Hong Kong (5.2 per cent). Economist Chia Ngee Choon has shown that adding a basic pillar to CPF to deal with the existing problem of retirement income inadequacy will cost about 1 per cent of GDP a year. So there is room to expand Singapore's currently very low public provision for social needs by reducing the opportunity cost and caregiving burden on families and women, which will partly pay for itself through higher labour force participation and incomes. Private market solutions will also emerge, as they have in other First World countries.
But these will not happen without profound mindset shifts at all levels of society - rejecting gender, age and racial discrimination, respecting and accommodating the needs of the elderly and the disabled, jettisoning social stigmas attached to mental disorders and disadvantage, accepting both the imperfection and the equality of human beings in our society.
Our own personal experiences with disability and eldercare, our respective professional expertise, and our knowledge and experience of living in Singapore and other countries all lead us to conclude that life for our fellow Singaporeans, in one of the world's richest countries, is endearing for many but can still be improved through both public and private actions requiring mindset shifts that will make us truly a caring and inclusive First World nation in social values and behaviour as well as income levels.
- Dr Noeleen Heyzer, a sociologist,has served as undersecretary-general of the United Nations and as executive director of the UN Economic and Social Commission for Asia and the Pacific, and the UN Development Fund for Women. Dr Linda Lim, an economist, is professor of strategy at the Stephen M. Ross School of Business at the University of Michigan.
