3. Literature Review
3.2 NHI Implementation and Taiwan
3.2.2 NHI and Taiwanese Fertility
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in Taiwan, using difference in differences methodology. They posited NHI as an ideal natural experiment to test the effect of insurance on savings, given the universality of its implementation and its lack of means-tested eligibility. Rather than redirecting healthcare savings into household savings, national health insurance decreased savings by 8.6-13.7%, with this reductive effect particularly strong for households with the highest financial risk—those in the lowest savings bracket. This study also uses a control group based on joint employment of husband and wife, where households with at least one government employee constituted the control group, like the present study does.
The effects of NHI on precautionary saving may be tied back to fertility through the concept of “yang er fang lao” (養兒防老), or raising children to provide for family members in old age, as discussed by Lai and Tung (2015). In Taiwan, familial transfers have long been a primary source of income security for the elderly, along with personal savings and public (state-sponsored) programs. Lai and Tung (2015) found that even as consumption level of the elderly increased between 1985 and 2005, and health consumption costs increased from 9% to 17%
during this period, the role of family transfers decreased significantly. If NHI constitutes a public program that reduced income uncertainty enough to affect precautionary savings, it may also have affected childbearing decisions that formerly played an important part in long-term financial planning.
3.2.2 NHI and Taiwanese Fertility. Despite a rich history of literature analyzing
population change, there remains a lack of consensus on the main drivers of low fertility today.
Certainly, economic and social factors must jointly influence childbearing decisions in any culture, and the fertility decline is widely considered a social effect of industrialization and modernization in developed countries. Evidence from pronatal policies of the last half century is
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equally mixed; because of the mixed nature of reform, it is sometimes impossible to separate the effects of financial and nonfinancial fertility incentives and determine which is most effective.
A variety of methodological challenges afflicts contemporary fertility studies. For country-level studies, period total fertility rate (TFR) is often the statistic of choice for the outcome variable. TFR, however, is a hypothetical statistic that generalizes average number of births per 1,000 women of average childbearing age, regardless of marital status and actual age distribution of mothers. The preferred statistic (when available) appears to be cohort fertility rate (CFR), which by nature offers a higher level of detail on age-specific fertility, birth order, and other factors. Hoem (2008) reports an ongoing debate over which type of fertility data, period or cohort, offers more insight. Period data may reveal short-term effects of policy, he claims, while cohort data is more suited to examination of long-term social change.
In addition, endogeneity is an unavoidable issue in demography or fertility studies.
Unobserved variables affecting both fertility and its potential causal factors, whether political, social or economic, undermine the validity of isolated statistical findings. Fertility change may drive policy; policy change may encourage or discourage fertility. Ashraf, Weil, and Wilde (2013) portray academic frustration with these obstacles: “We detect a general cynicism regarding the ability of social scientists to say anything useful about the economic effects of fertility – the issue is viewed as political rather than scientific, and conclusions from empirical analyses are assumed to reflect the preexisting views of authors” (p. 33). Despite these obstacles, the seeming inevitability of population aging and shrinkage spurs continued research into the underlying mechanisms of fertility change.
In Taiwan, fertility has been a relevant policy topic for decades, first in the 1960s when the state promoted smaller family sizes through the 1964 family planning program, and again
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when sub-replacement fertility became an issue in the 1980s. A wealth of research has examined Taiwan’s initial transition from high to low fertility (D. S. Freedman, 1975; R. Freedman,
Hermalin, & Chang, 1975; R. Freedman & Sun, 1969; Hermalin, 1976; Li, 1973; Rutstein, 1974), as well as its more recent decline from low to lower fertility (R. Freedman, Chang, & Sun, 1994; Keng & Sheu, 2011; M. Lee & Lin, 2016; Montgomery & Casterline, 1993; Parish &
Willis, 1993) with regard to the social and economic factors driving population change. The question of how healthcare availability has affected Taiwanese fertility, however, has gone unanswered.
There is a lack of studies on universal healthcare as an implicit form of pronatal policy in the broader literature, as well. Given the existing lack of scholarly consensus on which pronatal policies are most effective, it is important to continue questioning different avenues through which the state might influence childbearing behavior. The present study approaches fertility from an economic perspective, on the foundational assumption that lowering the cost of children via state subsidized healthcare will lower the barrier to childbearing. Among Taiwanese fertility studies related to NHI implementation, most focus on child quality outcomes such as infant mortality or usage of health services and not on how increased access to healthcare might affect reproductive decision-making.
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