Vietnam’s Baby Bonuses Unlikely to Stop the Aging Clock

Vietnam’s first Population Law, which took effect on July 1, has been touted as a crucial step in tackling the country’s rapidly aging population. The law offers various incentives to encourage couples to have more children, including childbirth subsidies and increased maternity leave for female employees. However, experts warn that reversing demographic trends will not be easy, and Vietnam’s efforts may ultimately prove insufficient to stem the tide of aging.

The statistics are stark: by 2050, Vietnam’s working-age population is projected to fall from 68.6% to 63%, while the proportion of the population aged 65 and over is expected to rise from 8.4% to 21.2%. This trend is not unique to Vietnam – across Southeast Asia, countries are facing similar challenges as their populations age at different speeds.

Singapore provides a notable example: the number of people aged 60 and above has surpassed those under 15. Thailand reached this milestone in the mid-2010s, and Vietnam is projected to follow by around 2035. The strain on healthcare services and social support systems is already being felt, particularly among informal workers who are often excluded from pension and social-insurance coverage.

Focusing solely on fertility rates may not be enough. As experts argue, governments must prioritize enabling people to live longer, healthier, and more productive lives. In Thailand and Vietnam, policy debates remain heavily focused on the total fertility rate, providing a clear target for policymakers. However, Wiraporn Pothisiri notes that “fertility has continued to decline despite these efforts, suggesting that low fertility is driven by broader structural economic and social changes that cannot be reversed through pronatalist policies alone.”

These underlying factors are the consequences of rapid urbanization and industrialization seen across Southeast Asia since the early 1990s. Vietnam’s low fertility rates are not simply a matter of choice but rather a symptom of deeper economic and social shifts.

A more effective approach would be to help couples achieve their desired family size while strengthening the health, productivity, and resilience of the existing workforce. This requires investment in preventive healthcare, flexible retirement policies, and technologies that help older people remain independent. Countries like Singapore offer useful examples of how to combine fertility-raising measures with policies on active aging.

Vietnam’s approach may be too narrow if it continues to focus solely on increasing births. As Bussarawan Teerawichitchainan notes, “countries that are better prepared are those that treat aging as a societal transformation, not only as a fertility problem.” By adopting this mindset, Vietnam can avoid the pitfalls of relying solely on pronatalist policies and instead focus on creating a more sustainable future for its growing elderly population.

Policymakers must be willing to rethink their assumptions about aging and its economic implications. If countries age before becoming rich, economic growth may slow, while income inequality and pressure on healthcare and social support systems may increase. This requires a fundamental transformation in how governments approach the challenges of aging, one that prioritizes prevention over cure and sustainability over short-term gains.

Vietnam’s baby bonuses are unlikely to stop the aging clock. Policymakers must focus on creating a more comprehensive strategy for addressing the country’s rapidly aging population. By doing so, they can create a future that is sustainable, equitable, and just – not only for the elderly but also for the working-age population and the broader society.