Implications of Taiwan’s Demographic Decline

Implications of Taiwan’s Demographic Decline

Implications of Taiwan’s Demographic Decline

In the first half of 2019, the number of births in Taiwan fell to the lowest point in eight years for the same period. If this trend continues, the annual number of births could fall below 180,000 this year. In 2018, the island hit an eight-year low with only 181,601 newborns, while the population continues to rapidly age, creating a number of challenges in the labor market, economy, health care system, and national security that will be faced by several generations of Taiwanese.

Taiwan’s current population stands at 23.58 million, with a total fertility rate of 1.06 children per woman aged 15 to 49 years in 2018, ranking among the lowest in the world. In other words, women of reproductive age in Taiwan had an average of 1.06 children last year. Compared to its neighbors in East Asia, Taiwan’s fertility rate ranks lower than Japan, which reached a rate of 1.42 children in 2018, but higher than South Korea’s 0.98 rate in the same year. Taiwan’s low birth rate is part of a broader regional trend of declining fertility rates across East Asia.

Taiwan’s population figure is often cited by Taiwan’s leaders as justification for self-determination and for greater representation across the Taiwan Strait and in the international community. A common refrain is that Taiwan’s 23 million people—and not China—will decide their own future. Indeed, for the Double Ten National Day celebration on October 10, 2019, President Tsai Ing-wen (蔡英文) said, “The overwhelming consensus among Taiwan’s 23 million people is our rejection of ‘one country, two systems,’ regardless of party affiliation or political position.” In other words, Taiwan has a sizeable population whose voices cannot be discounted on significant national issues and need to have proper representation on major decisions regarding its future, international status, and relations with China.

However, if Taiwan’s falling birth rate does not change over the long run, then its politicians will need to revise this oft-cited statistic. By 2060, Taiwan’s leaders might refer to the island’s 19 million people whose opinions need to be heard. In fact, Taiwan’s National Development Council estimates that its population will reach between 17.3 million and 19.8 million in 2060. Taiwan’s population will peak at 24 million between 2021 and 2025 before starting to decline as early as 2022, according to the council’s statistics.

This difference of at least 4 million people—from 23 million to potentially 19 million or less—makes Taipei’s message perceptually less powerful. That is because more people bring more weight to bear to assert certain national goals vis-à-vis China and the international community, such as more balanced representation in cross-Strait relations and participation in international organizations and forums. Indeed, it is more difficult to ignore societies that have larger populations than smaller ones.

Taiwan’s falling fertility rate is symptomatic of the shared challenges faced by post-industrialized economies. In the period after World War II, when Taiwan was mainly an agrarian society, annual births peaked around 300,000 to 400,000 newborns a year. Families were large, and it was common for women in Taiwan to have an average of six or seven children in the 1950s and 1960s.

However, the current generation of Taiwanese women are choosing to have fewer children, if any at all. Nearly 51 percent of Taiwanese women 15 years and over were in the labor force in 2017. Many women in Taiwan have higher levels of education than previous generations and are focused on their careers, and even married Taiwanese women may decide not to have any children. Some women have expressed concern that pregnancy could negatively impact their careers or worry that their employers may treat them in a disapproving light after they return from maternity leave. Other reported common concerns about starting a family were inadequate finances, long work hours, high housing costs, and dissatisfaction with Taiwan’s educational system. Furthermore, some married couples facing stagnant wages and the need to care for older parents simply cannot afford to raise children.

According to Taiwan’s Ministry of Interior, the number of births is linked to the number of marriages in Taiwan. As the number of people in Taiwan who marry each year declines, the lower the annual number of births. In 2018, 135,404 couples got married, marking a drop of 2,630 couples, or a 1.9 percent decrease, from the previous year. As of late 2018, there were 4.42 million unmarried people in Taiwan between the ages of 20 and 40, and more than 1 million unmarried people above the age of 40.

A hidden factor behind Taiwan’s low birth rate is the island’s high abortion rate. After Taiwan legalized abortion in 1985, the island’s abortion rate has skyrocketed. According to medical estimates, there are as many as 500,000 abortions a year in Taiwan. When some 400,000 women are using the RU486 abortion medicine (often called the “morning after” pill) a year, coupled with other women who undergo surgical abortions, the combined total surpasses the roughly 200,000 newborns each year. Taiwan’s government needs to tackle not only the low fertility rate but also the high number of unplanned pregnancies, many of which are terminated through elective abortions.

Taiwan needs a 2.1 replacement rate in order to maintain its current population. The National Development Council said that Taiwan government is making efforts to increase the fertility rate to 1.4 by 2030. In the past, the government has offered subsidies for couples with young children and provided exemptions for educational expenses. Taiwan’s government has also expanded its child care subsidy program, which provides monthly payments to families with young children. These measures aim to lower the financial costs of having kids and encourage young couples to have more children.

However, the effects of the island’s declining birth rate have been felt in the education system for more than a decade. Fewer students have led to the mass closure of schools and loss of jobs for teachers. Faced with approximately 100,000 fewer students per year, Taiwan closed 594 schools between 2012 and 2018. According to the Ministry of Education, enrollment at college and universities will drop from 273,000 in 2015 to 158,000 by 2028. Furthermore, an increasing number of private and public universities will either have to merge or face closure.

Meanwhile, Taiwan is becoming the fastest aging society in the world. Taiwan’s people are living longer with the average life expectancy at 80.7 years in 2018. The lifespan of Taiwanese men in 2018 averaged 77.5 years while that of women reached 84 years, according to the Ministry of Interior’s statistics. Taiwan will become the world’s first “super-aged society,” with the group of people 65 years and over expected to exceed over 20 percent of the population by 2026. The island has already become an “aged society” with 14 percent of the population at 65 years of age or over. The municipalities with the most senior citizens are Chiayi County, Yunlin County, Nantou County, and Taipei City.

Long-term care of elderly citizens has become a highly salient social, personal, and political issue for Taiwan, and will continue to be so for future generations. Coupled with Taiwan’s low birth rates, its growing elderly population will require more support from younger generations—and assistance from the government in cases where senior citizens lack extended family networks. Approximately 133,000 Taiwanese have quit their jobs to take care of elderly relatives. Later on, they may find it difficult to rejoin the labor force—not to mention facing social and psychological issues after the caregiving ends. Meanwhile, a shrinking labor market could negatively impact economic productivity, particularly for Taiwan’s high-tech economy and manufacturing sector. Taiwan may need to fill in the gaps through the development and integration of artificial intelligence and smart machinery or recruitment of foreign talent.

Taiwan’s government would have to absorb the costs of government programs and initiatives to help the elderly. Taiwan already offers preventive care programs and community-based social services for its elderly population. Taipei has ramped up spending to fund and broaden the array of government services to assist the elderly. Moving forward, the government is expected to raise its healthcare budget to provide services for senior citizens.

Another challenge for Taiwan’s government is to invest more in infrastructure—in the economic, social, and security spheres—to manage the myriad of issues brought about from an aging population and falling birth rate. Taipei needs to grapple with a shrinking tax base, increased social and financial pressure on the working population to care for elderly relatives, and lower recruitment for the military, among a host of other issues. This demographic challenge will impact various aspects of Taiwan’s political, economic, and social arenas, and remain a pressing issue for future generations of Taiwanese and Taiwan’s government.

The main point: Taiwan’s long-term challenge stems from its low fertility rate and rapidly aging population. This demographic challenge is a salient issue that will have long-lasting implications for its society, economy, and politics.