Quick summary: Vietnam has introduced an expanded population law offering financial bonuses and extended maternity leave to encourage larger families, reversing decades of strict birth control to combat one of the fastest-ageing demographics in the world. Economists and public health experts warn that these short-term incentives fail to address the high housing and childcare costs driving widespread financial anxiety, with 73% of surveyed citizens stating that their wages heavily restrict their reproductive choices. For public policy and healthcare practice, this demographic crisis highlights that sustainable population growth and individual well-being require continuous, comprehensive social support rather than minor cash handouts to prevent severe future labour shortages and safeguard the nation from critical economic stagnation.
One year after lifting its long-standing two-child limit, Vietnam is offering incentives for people to have more babies as the country risks getting old before it gets rich. A new population law and regulations coming into effect on Wednesday (1st July) extend maternity leave from six to seven months for mothers having a second child, alongside financial support measures.
If Hanoi residents Nguyen Kim Bich and her husband have a second child, she will get an extra month of maternity leave, free prenatal screenings, and a small cash bonus. “I could stay at home one more month with the baby, and my husband could stay home some more days,” the 32-year-old said as her young son played in a colourful pit of plastic balls.
The new regime subsidises prenatal and newborn screenings and establishes one-off cash bonuses of up to US$228, roughly two-thirds of the monthly average salary, for mothers who meet certain criteria.
“This is a significant shift in approach,” said Pham Thi Lan, head of population and development at the UN Population Fund (UNFPA) in Vietnam. “We are moving from controlling family planning to focusing on population development.”
The change comes in a country where Communist Party members faced sanctions for having a third child until last year, as the demographic picture darkens. Soaring life expectancy and declining birth rates have turned Vietnam into one of the fastest-ageing countries in the world, trends that reflect recent development successes but that economists warn could lead to labour shortages and strain the social safety net.
For Bich and her husband Lai, an accountant and advertising professional, the new measures fall short. Nearly half their combined monthly income of US$1,000 already goes to raising their first child, and they share a small house with his parents. “The benefits are nice but not enough. 1 more month of leave and US$75 can never attract us to have a second child,” she said, referring to the bonus amount she would expect to qualify for.
Vietnam’s preference for two-child families dates back to the 1960s, when authorities in the north sought to curb explosive population growth during the war. An official limit was adopted in 1988, though enforcement was never as strict as in neighbouring China, where sterilisations and forced abortions accompanied a one-child policy that was lifted in 2016.
Vietnam is not yet locked in a demographic decline on the scale of South Korea or Japan. Its birth rate, at 1.93 children per woman, sits below the replacement level of 2.1 but remains comparatively strong against most developed nations. Life expectancy has risen to nearly 75, and the share of the population over 60 has passed 10%. By the middle of the century, that group is projected to make up 25% of the population, at which point the population will begin to shrink, according to government projections.
What worries economists is that this shift is happening earlier in Vietnam’s development than it did in other ageing countries. Vietnam is among the fastest-growing economies in Asia but remains relatively poor, with GDP per capita around US$5,000, about half of Japan’s when its birth rate matched Vietnam’s current level in the early 1980s, without adjusting for inflation.
That gap means Vietnam will have “less time to adapt to an aged society than many advanced economies had,” the World Bank warned in a 2021 report, describing a “narrow window” for reform before the country faces “major slowdowns in growth.”
UNFPA’s Lan welcomed the legislation, saying it “addresses the current demographic shift” and allows couples to make their own reproductive decisions. However, she acknowledged the limits of one-off benefits like cash bonuses, noting that continuous support through child rearing is often necessary to change parents’ minds. Without more “comprehensive support,” Lan said, high housing and childcare costs will continue to “hinder people from fulfilling their desire to have children.”
That concern is echoed in a recent government survey, in which 73% of married respondents said their wages influenced their decision to have children.
Tran Minh Anh, 24, who earns about US$380 a month as a cashier in Hanoi, put it more bluntly. “I will not have any kids at all,” she said, describing the prospect as “too much pressure, financially and mentally.” “How can I take care of one more person? No way!”
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