TITLE:
Can Government Financial Aid Save an Aging Society? A Systematic Review on the Effect of Financial Incentives on the Fertility Rate
AUTHORS:
On Chi
KEYWORDS:
Low Fertility Rate, Financial Incentive, Government Financial Aid, Childcare Subsidies, Tax Benefits, Direct Cash Payments, Employment Benefit, Socio-Economic Policies
JOURNAL NAME:
Open Journal of Business and Management,
Vol.13 No.2,
March
13,
2025
ABSTRACT: This paper examines how government financial aid can address the challenges brought about by declining fertility rates in aging societies. The fertility rate is a crucial demographic measure that affects economic growth, labor force makeup, and the viability of health and pension systems. With many developed countries facing consistently low fertility rates, the effectiveness of financial incentives as a policy tool has sparked significant debate. The study systematically reviews existing literature, exploring the impact of various financial incentives—such as direct cash payments, tax benefits, and childcare subsidies—on fertility rates in different national contexts. The findings indicate that while most financial incentives lead to short-term increases in birth rates, their long-term effectiveness remains uncertain. The paper underscores the need to combine financial incentives with broader socio-economic policies to effectively tackle the complex issue of declining fertility. It concludes that a multifaceted approach, tailored to the specific demographic and economic conditions of each country, is crucial for the success of fertility-boosting initiatives.