Family Values in Social Safety Nets: Evidence from East Asia

Introduction: Welfare policies serve not only to reduce poverty but also as tools to influence family formation. For example, TANF uses a family cap to curb incentives for forming large families, and the eligibility rule of EITC suffers from a marriage penalty problem. Currently, there is little evidence investigating how different welfare programs jointly affect family formation. In this study, we use East Asian societies as an example to compare the family values embodied in multiple welfare policies.

Background: East Asian welfare systems are commonly described as regimes with a strong emphasis on families providing welfare, where families are expected to be self-sufficient and meet the welfare needs of their members. Existing East Asian welfare literature focusing on family values has mainly investigated care policies, including childcare and elderly care systems. Little is known about how family values are embedded in social safety nets, namely policies targeting low-income families. Understanding the degree to which social safety nets support childrearing and marriage is important, as East Asian societies face similar demographic challenges such as low fertility rates and the dissolution of marriage institutions. It is crucial to explore policy solutions to avert these trends. Scrutinizing family values in social safety nets not only can provide governments with evidence to review their policy design but also help them pursue their vision for society.

Methods: We used a model family approach to collect income packaging data for over 60 hypothetical family profiles, varying in income levels (from no earnings, one earner, to two earners) and family compositions (e.g., childless adults, single parents, and two-parent families). Income packages included information on labor income, welfare benefits, tax and social security contributions, and the cost of services. Welfare benefits encompassed social assistance benefits, food subsidies, housing subsidies, child benefits, childcare subsidies, education subsidies, fertility subsidies, medical subsidies, transportation subsidies, utility subsidies, work subsidies, and other subsidies. We collected this data in mainland China, Hong Kong, Japan, Singapore, South Korea, and Taiwan in 2020 and 2021. We calculated the generosity of welfare support and contrasted how the six East Asian societies differ in supporting childrearing, single parenting, and incentivizing marriage in their welfare benefit design. Specifically, we examined support for childrearing by comparing benefit generosity between childless adults and parents with children across societies. We investigated marital values by contrasting benefit generosity between single and married families. We further dissected the results by different welfare programs to investigate how each program exhibits family values.

Results and Discussion: We found that Singapore provided the least premium to raising families with children; Japan and Korea provided stronger support for single parents, whereas welfare systems in Taiwan and Singapore favor two-parents households. We found that the main drivers of varying family formation incentives are the design of social assistance programs, child benefits, and housing subsidies. This finding demonstrated that multiple programs jointly created family formation incentives, and deliberate review is required to assess whether welfare design aligns with societal vision.