HANOI, Vietnam – Just one year after scrapping its long-standing two-child policy, Vietnam is rolling out a series of incentives aimed at encouraging families to have more children as the communist nation confronts the prospect of growing old before becoming wealthy. Under a new Population Law and related regulations that took effect on July 1, mothers who have a second child are now entitled to seven months of paid maternity leave instead of six. The government is also offering financial assistance, including free prenatal and postnatal health screenings and cash bonuses for eligible mothers.
For 32-year-old Nguyen Kim Bich and her husband in Hanoi, having a second child would mean an extra month at home with their baby, additional leave for her husband, free medical check-ups and a modest cash payment. “I’ll be able to stay home with my child for another month, and my husband will also get several more days off,” she said while watching her young son play. Eligible mothers can receive a one-time payment of up to US$228, depending on local government schemes and qualifying conditions. Pham Thi Lan, Head of Population and Development at the United Nations Population Fund (UNFPA) in Vietnam, described the reforms as a major policy shift.
“We are moving away from controlling family planning towards focusing on population development,” she said.
The changes mark a significant reversal for a country where Communist Party members could previously face disciplinary action for having a third child, a restriction that remained in place until last year. Vietnam now finds itself among the world’s fastest-ageing societies as longer life expectancy combines with declining birth rates. While this reflects decades of successful economic and healthcare improvements, economists warn it could eventually lead to labour shortages and place increasing pressure on pension and social welfare systems. Despite the new incentives, Nguyen Kim Bich says they are not enough. She and her husband, an accountant and advertising professional, earn a combined income of about US$1,000 a month, nearly half of which is already spent raising their first child. The family also continues to live in a small home with her husband’s parents. “Even with the benefits, it’s still not enough,” she said. “An extra month of leave and around US$75 won’t convince us to have a second child.”
Vietnam’s two-child policy dates back to the 1960s, when communist authorities in the north sought to slow rapid population growth during wartime. Formal nationwide restrictions were introduced in 1988 but were never enforced as strictly as China’s former one-child policy, which included forced sterilisation and abortions before being abandoned in 2016. Although Vietnam has not yet entered the severe demographic decline seen in countries such as South Korea or Japan, fertility has already fallen below the replacement level. The country’s fertility rate currently stands at about 1.93 children per woman, below the replacement rate of 2.1, while average life expectancy has climbed to nearly 75 years. More than 10% of the population is now aged over 60, a figure the government expects to reach 25% by the middle of the century, when the overall population is also projected to begin shrinking. Economists are particularly concerned because Vietnam is ageing at a much lower income level than many developed nations did.
Despite being one of Asia’s fastest-growing economies, Vietnam’s GDP per capita is only around US$5,000—roughly half of Japan’s when it reached a similar fertility rate in the early 1980s, without adjusting for inflation. The World Bank has warned that Vietnam has only a limited window to implement reforms before population ageing significantly slows economic growth. Vietnamese leaders describe the new population law as one of the country’s key responses to the looming demographic challenge.
UNFPA’s Pham Thi Lan welcomed the legislation, saying it addresses today’s demographic realities while giving couples greater freedom to decide how many children they want. However, she cautioned that one-time cash bonuses alone are unlikely to reverse declining birth rates.
“Without comprehensive support, including affordable housing and childcare, the high cost of raising children will continue to prevent many people from fulfilling their desire to have children,” she said.
Her comments reflect findings from a recent government survey, in which 73% of married respondents said income levels played a major role in their decision about whether to have children.
Twenty-four-year-old Hanoi cashier Tran Minh Anh, who earns around US$380 a month, agrees. “I don’t want to have any children at all,” she said. “It’s too much pressure—financially and mentally. How could I take care of another person? There’s no way.”
Vietnam’s demographic concerns mirror those increasingly seen across Southeast Asia, including Thailand, where fertility rates have also fallen well below replacement level and the country is rapidly becoming an ageing society. Thai policymakers have likewise introduced measures aimed at supporting families and boosting births, but experts warn that rising living costs, housing prices, childcare expenses and stagnant wages continue to discourage many young couples from starting larger families, suggesting that financial incentives alone may not be enough to reverse the long-term demographic trend.
