February 01, 2006

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Hong Kong's demographic deficit

An article in The Standard sees Donald Tsang's recent announcement to cut civil servants' work week to five days (from five and a half) could lead to a baby boom:

Chief Executive Donald Tsang's proposal last month to reduce the work week for civil servants to five days may very well boost productivity - and not just in the work place. "The five-day work week will allow Hong Kong people more time for courtship and more time to make babies," said Paul Yip, senior lecturer with the Department of Statistics and Actuarial Science at the University of Hong Kong.

And babies are just what Hong Kong needs, as a host of factors - including a teetering birthrate and a longer lifespan - are wreaking havoc on the city's demographics.

Honey, I don't have to work tomorrow, let's have another kid instead. Back here on Planet Earth, the real factors in Hong Kong's low fertility rate are easily found:


Hong Kong residents put in an average of 55 hours of work each week, according to a 2004 study conducted jointly by Hong Kong University's Corporate Environmental Governance Programme and equal opportunity group Community Business. Singaporeans, in contrast, averaged only 50 hours of work a week in 2005, according to the Ministry of Manpower. Furthermore, of the 1,000 Hong Kongers who responded to the study, more than 75 percent said they were suffering from stress and a lack of exercise, and 28 percent said they took sick leave simply to recover from long work hours.

All this time at the office is one reason often cited for why Hong Kong ranks near the bottom in surveys comparing the frequency of sex in various countries.

Hong Kongers aren't doing it enough. But there's more to the problem:
"Who would have three children in Hong Kong's present climate? For starters, it's expensive, and the education system is in a mess." [said Paul Yip]. Even if every family was to have the recommended number of children, Yip argued, Hong Kong simply does not have the educational, health care and housing resources to support such population growth.

But Yip said he has had a hard time persuading people that Hong Kong's population decline is a pressing issue. With a fertility rate of 0.93 in 2004 - which means the average woman will have less than one child in her lifetime - Hong Kong currently has one of the lowest birth rates in the world. In 1988, it was 1.4 percent. The minimum replacement fertility rate is 2.1 children for each couple.

Hong Kong faces the same problem many developed economies face. People are living longer, getting richer and having fewer children. The changing composition of age distribution means more retireees, less kids and less workers to support both. Is that so bad? Not necessarily - it will mean economic growth in aggregate will slow or even decline, but per capita GDP may stay the same or even continue to increase. It means more school closures and more hospital openings (and more fitness corners for seniors, although my kids loving playing on them).

But Hong Kong also faces some unique problems. The average apartment size in this city is 600 square feet. Try having a family of 5 in that space. Pollution is bad and getting worse. People are wealthy enough now they don't need to have kids to support them in old age.

But for all the doom and gloom, there is an easy and obvious solution. Immigration. I've said it before - the easiest way to avoid this demographic crunch is to open the immigration gates to those prepared to come and work, filling in the missing age brackets. It requires massive cultural and government policy changes. But it is easy, pays for itself in the medium term and quick. The same applies to Japan, which is even more advanced in its aging population problem.

Hong Kong's well compensated civil servants could use their compressed work week to contemplate how to make greater immigration happen. Then they can go home and have some more kids.

posted by Simon on 02.01.06 at 09:18 AM in the Hong Kong category.


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Gong hei fat choi! I heartily agree with your suggestions on immigration. Historically, Hong Kong has always gotten most of its best people that way (rather than from homegrown talent) since immigrants are always more motivated.

Maybe Hong Kong should try an LBO of Shenzhen and absorb its citizens, giving the other 90% of the city's population immigrant work visas.

posted by: HK Dave on 02.01.06 at 10:07 AM [permalink]

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