Third child incentive: Can it reverse Bhutan’s declining birth rate?

A generation ago, large families were the norm across Bhutan. Today, the size of the average family has dramatically shrunk. Births are falling, parenthood is increasingly delayed and, for many, foregone altogether. The government has introduced the Third Child Plus Programme (TCPP), offering Nu 10,000 per month for third and subsequent children, payable until the child reaches the age of three. This initiative is the country’s most direct attempt yet to arrest a demographic decline that has been building for decades. Whether financial support alone can shift a deeply rooted social trend is another matter entirely.

Bhutan has undergone one of the fastest fertility declines in South Asia. The total fertility rate (TFR) fell from 5.6 children per woman in 1994 to 2.5 in 2005, before dropping to 1.7 in 2017, according to the Population and Housing Census. Although the National Health Survey 2023 estimates the TFR at 2, it is not used for trend analysis because of differences in methodology. Registered births have tracked a similar downward arc, from 11,001 in 2015 to just 7,230 in 2025, based on provisional data. The implications are long-term and serious. Those aged 65 and above are projected to rise from 5.9 percent of the population in 2017 to 13.4 percent by 2047. A shrinking working-age population supporting a growing elderly one is a pressure Bhutan, like many small nations, is ill-equipped to absorb. Currently, 62,271 women between the ages of 25 and 45 already have two or more children – a cohort either in or approaching the final years of their reproductive lives. Without targeted intervention, officials warn, a substantial number of potential third and higher-order births will simply not happen.

Mothers who are the target of the program say the financial support is insufficient. Thandri Sunwar, 35, gave birth to her third child on June 10, 2026. A vegetable vendor at Kaja Throm in Punakha, she welcomed the monthly support but was candid about its limits. “I think the government should focus on other factors that make it easier for mothers like me to raise children,” she said. Much of the Nu 10,000, she added, would likely go towards repaying loans and meeting existing household costs rather than the care of her newborn son. Phurba, a civil servant based in Punakha, has four children. His third child is two years old; his fourth – unplanned – is eight months old. Both he and his wife work full-time. “Raising children is challenging when both parents are working,” he said. “Even basic necessities like nappies are expensive. Nu 10,000 is not enough. There should be more flexible support and real incentives to encourage people to have children.” A mother of two daughters echoed that sentiment. A single packet of nappies, she said, costs more than Nu 900. Once milk formula, clothing, healthcare and childcare are factored in, the monthly payment is absorbed quickly. “When you add it all up, the money runs out fast,” she said.

Across both rural and urban areas, the women interviewed by Kuensel returned repeatedly to the same themes: the cost of childcare, the inadequacy of maternity leave, and the absence of workplace flexibility. One mother of two described childcare as the single greatest barrier to having more children. She said babysitters cost more than Nu 10,000 a month, cancelling out the very incentive the government is offering. Maternity leave in the private sector, often capped at three months, is too short. And while fathers can share the load, the daily responsibilities of feeding and caregiving continue to fall disproportionately on mothers. A 32-year-old mother of a four-year-old said she regularly brings her child to the office because there is no one at home to provide care. “Money alone cannot solve the problem,” she said. “Without reliable childcare, many women will hesitate to have more than one child, or choose not to have children at all.” Many mothers said instead of offering money to encourage childbirth, the government should focus on making it easier for parents to balance work and family life, more flexible workplace policies, longer maternity and paternity leave, affordable childcare services, and stronger community support systems.

Officials at the Office of Cabinet Affairs and Strategic Coordination (OCASC), which oversees the programme, acknowledge that cash incentives alone will not reverse the trend. Tashi, the programme’s focal officer, said the TCPP was designed with this limitation in mind. The programme framework explicitly recognises that family-friendly enabling conditions are essential alongside any financial measure. Accordingly, the government has directed multiple agencies to develop complementary support. The Royal Civil Service Commission is reviewing parental leave, flexible working and increased paternity leave. The National Commission for Women and Children is tasked with establishing crèches. However, it remains unclear when these measures will be implemented and how comprehensive they will be. Meanwhile, Bhutan’s birth rate continues to decline, and the impact of the TCPP will only be assessable in a few years. Experts emphasize that financial incentives alone are not enough; they must be supported by structural reforms and gender equality policies. Bhutan’s demographic future depends on how successful this multi-pronged strategy will be.