Wednesday, August 20, 2008

Babies are not a money issue

Last week The Straits Times published a few articles comparing fertility rates in Taiwan, South Korea, Japan, the UK and Singapore (see: Baby Perks: Do they really work?)

There is no doubt that finance is a key concern among young couples today when considering whether to set up a family. Like in Japan, Korea and Taiwan, the Singaporean government has dangled carrot after carrot in front of couples to procreate to very little effect.

The question here is not whether these financial perks are too small to lure couples into a life time of monetary responsibility, but WHY are we even thinking about babies in financial terms. Is the decision to have a baby a rational choice? And can we really measure the opportunity costs to having a child?

Paulin Straughn, Sociology professor at NUS told me that it is a fairly recent trend that Singaporeans started thinking about children in financial terms. She says we are being bombarded by ads everywhere by banks and various financial institutions about how responsible parents should start planning and saving for their childrens' education. This has reinforced the notion of cost consequences of having a child.

A colleague of mine also told me that when a couple applies to the bank for a house loan, they ask how many children they have and vary the size of the loan accordingly, creating a competition for financial resources between the parents and their children.

At the end of the day, having children is not a rational choice, and simply cannot be one. How does one measure the happiness a child brings to a parent by a simple hug or chuckle? How does one measure the pride a parent feels when his/her child wins an award?

There can be no matrix to measure the costs and benefits, much less the opportunity costs of having a child.

Maybe the government is dangling the wrong carrots in front of its young couples.

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