Could Unemployment Insurance in Singapore Increase the Fertility Rate?

Could Unemployment Insurance Increase Singapore's Fertility Rate?

Unemployment insurance in Singapore is not a new concept.

A payout scheme to unemployed workers funded by a pool of contributions from employed workers and companies, unemployment insurance has actually been implemented in Singapore with limited successes in the past by private insurers (and discontinued due to poor take-up rates).

You could also argue that our CPF contributions, both by employees and employees, are a form of unemployment insurance for our retirement.

The question that has been raised by several political parties, most recently by the Workers’ Party, is whether Singapore should implement unemployment (or redundancy) insurance.

redundancy insurance

Graphic: Workers’ Party

You can compare and contrast other political parties’ suggestions here.

Unemployment insurance is a sexy idea

Who wouldn’t be happy at the thought of having some form of payout upon being involuntarily unemployed?

Mothers who are dismissed against their will would certainly celebrate having extra funds to pay for their children’s expenses, which can run up to a thousand dollars or more per child per month.

Perhaps unemployment insurance could indirectly encourage couples to have more children, as there is an immediate safety net in the event a parent is made redundant or dismissed.

Singapore fertility rate

Source: Department of Statistics, Singapore


1. Will unemployment insurance lead to higher retrenchments?

If redundant employees are entitled to unemployment insurance, companies could choose to forgo distributing retrenchment benefits and save the money for other business purposes.

Since insurance ROI “favours” those who claim more, companies may not think twice about retrenching more workers since the company doesn’t have to foot the retrenchment benefits bill per headcount anymore.

2. What if resource costs for administering unemployment insurance could be deployed elsewhere for longer term benefits?

Insurance payouts don’t last forever. What if a retrenched mother is unable to find a job after six months?

Would she prefer a Returnship Programme (as suggested by NTUC) which offers return-to-work placement and training? Which in turn may yield years of 100% income instead of 0.5 years X 40% median wage (as proposed by the Workers Party)?

NTUC returnship programme

Source: Singapore Motherhood

3. Would you contribute $1.90 a month to help an unemployed stranger?

Would you prefer to be:

  • an unemployed person living on 40% of the median wage
  • or the “left-behind” employed person doing the job of your 3 or more retrenched colleagues AND paying 0.05% of your monthly income every month to support them financially?

4. Who wants to be the sucker when you can earn unemployment benefits from the system?

Wouldn’t it be easier for you to work for short periods of time and pull stunts to get your employment terminated “against your will” so you can claim multiple tranches of unemployment insurance payouts?


Perhaps unemployment insurance in Singapore could really boost our country’s dismal fertility rate in the short term, but is this scheme sustainable in the long run?

Julia Chan

Julia Chan

Julia Chan has always loved science, till she realised the lack of Life Sciences jobs wouldn't bode well for her career upon graduation.

She instead decided to make herself useful in other sectors such as education and manufacturing, doing a variety of roles such as business development, marketing and teaching, picking up an MBA along the way.

Her accumulated life experiences and perspectives as a working mother propelled her to start her own blog where she writes on a range of topics such as work, parenting, travel and government.
Julia Chan



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