Vietnam unveils ‘baby bonus’ after scrapping two-child policy

Vietnam is rolling out incentives to boost its birth rate, a year after abandoning its long-standing two-child policy. The government aims to counter the risks of the nation growing old before it becomes wealthy. New regulations effective July 1 extend maternity leave to seven months for mothers of a second child and provide financial assistance. For Hanoi resident Nguyen Kim Bich, this means an extra month of leave and a potential cash bonus of up to US$228, roughly two-thirds of the average monthly salary. Prenatal and newborn screenings are also subsidized. "This is a significant shift in approach," said Pham Thi Lan, head of population and development at the UN Population Fund in Vietnam. "We are moving from controlling family planning to focusing on population development."

“

I could stay at home one more month with the baby, and my husband could stay home some more days.

The policy change comes as Vietnam grapples with a rapidly aging population and declining birth rates, trends that signal development success but also threaten labor shortages and strain the social safety net. While the birth rate remains relatively robust at 1.93 children per woman compared to many developed nations, life expectancy has risen to nearly 75, and those over 60 already exceed 10 percent of the population. Projections indicate that by mid-century, this demographic will constitute 25 percent, and the population will begin to shrink.

However, for couples like Bich and her husband, the new incentives may not be enough. They already dedicate nearly half their combined US$1,000 monthly income to their first child. "The benefits are nice but not enough. One more month of leave and US$75 can never attract us to have a second kid," Bich stated, estimating the portion of the bonus she would likely qualify for. Vietnam's historical preference for smaller families dates back to the 1960s, with an official limit established in 1988, though enforcement was less stringent than in China.

“

This is a significant shift in approach. We are moving from controlling family planning to focusing on population development.

While Vietnam is not yet facing the severe demographic crisis seen in countries like South Korea or Japan, the government is proactively seeking to slow the demographic shift. The current birth rate is just below the replacement level of 2.1 children per woman, but economists are concerned about the speed at which the population is aging and the potential long-term economic consequences.

“

The benefits are nice but not enough. One more month of leave and US$75 can never attract us to have a second kid.