A universal child endowment could raise birth rates but would be expensive

In his dystopian novel, Brave New World, Aldous Huxley imagined a society where children were raised by the state rather than families.

While none of us may wish for such a future, Singapore’s record low fertility rate is forcing us to confront an uncomfortable truth: many young Singaporeans are unwilling or unable to bear the financial or time costs of starting families or having more than one child.

Multi-pronged efforts by the Government over the years – spanning financial incentives, childcare subsidies, extended parental and childcare leave as well as flexible work arrangements – have not succeeded in reversing the slide in birth rates. Nor have campaigns promoting the joys of marriage and parenthood made a significant difference.

Addressing this existential challenge may require rethinking how society shares the cost of raising children. One radical possibility is to treat children as a “public good” whose cost of raising is largely borne by the state and society. This may sound far-fetched, but it is worth considering as a thought experiment just what it would take to raise birth rates, and whether society is prepared to shoulder the cost.

The root causes of declining fertility rates

Solving a problem requires diagnosing its root cause. Why is fertility declining throughout the developed world, and particularly in East Asia, when birth rates were so much higher half a century ago? Hong Kong, Taiwan and South Korea have seen their total fertility rate fall from 3 or higher in the mid-1970s to below 0.9 now. This pattern suggests that fertility decline is not merely cultural but structural – driven by development itself.

Where once children provided labour or supplemented family income from a relatively early age, they are now a financial liability for much longer given extended schooling and costly tertiary education.

The cost of bringing up children has risen sharply as economies developed and living costs climbed. It is particularly in competitive societies with significant income disparities that parents feel the need to focus their time and resources on fewer children rather than spread them over more offspring. 

The disappearance of the ‘kampung’

It is not just the direct costs of raising children; the opportunity costs in terms of parental – usually women’s – careers have also grown as incomes and career aspirations rise.

Gone are the days when parents could happily leave their children in the care of relatives or neighbours while they went about with work or errands. Kampung-style communal living has given way to atomised family units where neighbours greet one another but seldom look after each other’s children. In Singapore, grandparents are often mobilised to help take care of the kids, but not all families have recourse to such support. 

It is little wonder then that having children is, for many, a huge decision that affects personal finances, career trajectories, time and leisure. Any attempt to raise the fertility rate must therefore address both the direct and opportunity costs of having children.

A universal child endowment

If the financial burden of raising children is a major deterrent, one radical response would be to socialise these costs through a universal child endowment. By shifting a large portion of child-rearing costs to the state, such a policy would fundamentally alter the social compact, recognising that children benefit society as a whole.

How much does it cost to raise a child in Singapore? A 2025 report by personal finance website Dollars and Sense put the figure at a minimum of $273,600 from birth to age 18, despite the Government already spending over $200,000 per child in grants and education subsidies up to secondary school. 

Multiply this estimate by a modest target of 40,000 births per year – close to a 50 per cent increase from the 27,500 resident births registered in 2025 – and we are looking at an annual fiscal outlay of approximately $11 billion if the Government were to fully cover the cost. Increasing the birth rate would also see the Government incur more in existing grants and education subsidies, which could add another $3 billion to $4 billion to the fiscal bill, bringing the total increase to $14 billion to $15 billion. 

This is an enormous sum, but it is still less than the Net Investment Returns Contribution – the annual amount the Government is permitted to spend from investment returns on the nation’s reserves – which contributed about $24 billion to the budget in FY2025. 

The state could probably afford such spending but it would involve difficult trade-offs with other priorities. Singles and childless couples might also question whether it is fair for them to shoulder such a burden.

Money may not be enough

Even if the direct costs of raising children were fully covered by the state, couples might still hesitate because of the time and opportunity costs of parenting. Much of this stems from the pressures of a competitive society. Parents feel compelled to invest significant time and resources to ensure their children succeed academically and secure good careers. Subsidised childcare and student care services can help, but many operate only during standard weekday hours.

A truly comprehensive approach would therefore require a major expansion of childcare and student care services, possibly at nominal cost to parents. Some have suggested reviving communal forms of caregiving, where neighbourhood networks help look after children. Pre-schools may have to be nationalised to ensure uniform standards and quality, but this could inflate the fiscal bill further.

One possibility would be to repurpose community clubs into shared child-minding spaces where parents could leave their children in a safe and supervised environment. Over time, some of these responsibilities could be devolved to trusted volunteers who are vetted and appointed by grassroots leaders. 

Such schemes, however, would require high levels of trust, clear accountability, and professional supervision to address concerns over safety and liability.

Even so, some parents may not feel confident enough to leave their children in such an open environment. Another possibility is to match young parents with one or more couples who could serve as godparents to their children. These godparents may be seniors with children who are already grown up, or they may be parents with the time and capacity to care for both their own children and godchildren within a larger extended family. 

The Government could launch a movement to induct families into this scheme. Community and religious organisations could be enlisted to matchmake families living within the same neighbourhood. Incentives could be given, including vouchers for godparent bonding activities such as visits to local attractions.

Immigration as a partial solution

Given the cost and complexity of socialising child-rearing, it is worth asking whether declining fertility is truly existential. Singapore faces no immediate risk of population decline if immigration continues, particularly if families with children are prioritised.

But immigration also changes the social fabric of society and requires sustained efforts at integration. More importantly, it does not address the underlying question: Do Singaporeans themselves feel able to start families?

Sharing the costs of child-rearing is not an all-or-nothing decision. The Government will likely continue expanding family grants and subsidies, while experimenting with new forms of childcare and community support. However, without an intervention of the scale of what this thought experiment envisages, the gains would likely be modest – slowing the decline in fertility rather than achieving a significant rebound.