Vietnam abolished its long-standing two-child limit Tuesday to try and reverse declining birth rates and ease the pressures of an aging population.

The National Assembly passed amendments scrapping rules that limit families to having one or two children, state media Vietnam News Agency reported Wednesday.

The rules were usually stricter for Communist Party members, who could miss out on promotions or bonuses if they had a third child.

Vietnamese families are having fewer children than ever before. The birth rate in 2021 was 2.11 children per woman, just over the replacement rate required for a population to avoid shrinking over the long term. Since then, the birth rate has steadily declined: to 2.01 in 2022, 1.96 in 2023 and 1.91 in 2024.

Vietnam isn’t the only Asian country with low fertility. But, unlike Japan, South Korea or Singapore, it is still a developing economy.

Nguyen Thu Linh, 37, a marketing manager in Vietnam’s capital Hanoi, said she and her husband decided to have only one child because they wanted to give their 6-year-old son the best education and upbringing that they could afford.

Vietnam introduced rules blocking families from having more than two children in 1988 to reduce pressure on limited resources after years of war, first with France and then the United States, as the country transitioned into a more market-oriented economy. The population rose from about 62 million to just over 100 million in 2023, the most recent year for which data is available.

Vietnam’s “golden population” period — when working age people outnumber those who depend on them — began in 2007 and is expected to last until 2039. The number of people who can work is likely to peak in 2042 and, by 2054, the population may start shrinking.

All of this could make it harder to grow the economy, since there will be fewer workers while the cost of supporting the needs of the elderly increases.

Birth rates in Vietnam aren’t falling evenly. In Ho Chi Minh City — the country’s biggest city and economic hub — the fertility rate in 2024 was just 1.39 children per woman, much lower than the national average. At the same time, nearly 12% of the city’s population was over 60, putting pressure on welfare services.

To help, local officials started offering about $120 to women who have two children before turning 35 last December.

It also offers some of the most generous family benefits in the region, including six months of fully paid maternity leave and free healthcare for children under 6.

Tuition in government schools is free until the age of 15 and, starting in September it’ll be free till the end of high school.

Vietnam is also dealing with a unbalanced gender ratio, partly due to long-standing preferences for sons. According to state media, the distortion is more concentrated in Vietnam’s northern Red River delta, which includes Hanoi.

Doctors aren’t allowed to tell parents the baby’s sex before birth, and sex-selective abortions are banned. But despite this, some still hint at the baby’s sex using coded language, said state media VN Express, citing a government report.

On Tuesday, the health ministry proposed tripling the fine for choosing a baby’s sex before birth to $3,800, state media reported.

China imposed a one-child policy in 1979 amid worries about overpopulation. But as the country faces growing concerns about the long-term economic and societal challenges of an aging population, it has been slowly easing the policy to allow a second child and then a third child in 2021, but with little success in boosting birthrates.