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Will Japan's new plan to boost birth rates work?

Julian Ryall in Tokyo
December 14, 2022

The Japanese government is planning to offer couples extra money for having children, but with costs rising steeply and wages static, that is unlikely to be an adequate incentive, say experts.

An elderly person moves down a staircase alongside a young woman who carries a child in her arms
In recent decades, the Japanese have been opting to get married later in life and have fewer childrenImage: David Mareuil/AA/picture alliance

The Japanese government is planning to provide an additional 80,000 yen (€556, $592) to couples who have a child as Tokyo looks for ways to halt the alarming decline in the nation's birth rate. 

But critics say it is not enough to convince people struggling with rising prices and stagnant incomes to have a baby.

Others point out that simply throwing money at the problem has been tried in the past and is unlikely, once again, to be the solution.  

At present, new parents in Japan receive a one-off payment of 420,000 yen when a child is born. The Ministry of Health, Labor and Welfare has proposed that figure be increased to 500,000 yen and it is understood the new amount will be introduced at the start of the next fiscal year, on April 1, 2023.

Worsening conditions 

The initiative comes on the heels of the latest worrying Japanese population statistics.

There were 125.7 million Japanese in 2021, down from a peak of 128 million in 2017, while a study in the medical journal The Lancet before the coronavirus pandemic predicted that Japan's total population would contract to 53 million by the end of the century.

Life begins (again) at 70 in Japan

In recent decades, the Japanese have been opting to get married later in life and have fewer children, a conscious decision due largely to financial concerns.

That figure now looks rather optimistic given the problems that have been brought on the nation by the pandemic and, more recently, the impact of the conflict in Ukraine on the global economy. 

According to figures released by the Health Ministry in mid-September, just 384,942 babies were born in the first six months of this year, down fully 5% from the same period of last year.

The ministry now anticipates that the total number of newborns for the full year will be less than the 811,604 new arrivals last year and almost certainly below 800,000, which would be a first since the central government started collating figures in 1899.

Children too expensive 

"The money we received from the government was definitely helpful when I had my son and we were grateful, but it still did not cover all my hospital expenses," said Ayako, a housewife from Tokyo who did not want to give her family name.  

Ayako's situation was complicated to a degree by her needing a caesarean delivery, she said, but the average cost of having a baby in Japan hovers at around 473,000 yen, the Mainichi newspaper reported.

An elderly person walks with the help of his medical chair on the street in Tokyo
There were 125.7 million Japanese in 2021, down from a peak of 128 million in 2017Image: David Mareuil/AA/picture alliance

"We have talked about having another child, and we would like to, but at the moment my husband and I have concluded that it's not really possible," Ayako told DW. "I would say that 80,000 yen would be useful, but how far will that go in reality?"

"A baby needs clothes and food, and they quickly grow up and require even more," she said.

"I took time off work and that affected the amount we earned. And while my husband has a steady job and is earning the same as before the pandemic, costs have been rising sharply in recent months, for things like basic foodstuffs and fuel."

A short-sighted approach?

The national government, regional authorities and many local municipalities have all come up with incentives designed to encourage people to have larger families — including the offer of cars and even rent-free homes in rural regions that are feeling depopulation most dramatically — but the majority have simply promised money.  

That is a short-sighted approach that fails to address the broader problems for young couples in Japan today, said Noriko Hama, an analyst and professor of economics at Kyoto's Doshisha University.  

"This is not going to magically solve the problems that Japan, as a nation, faces," she said. "It is not a question of just throwing money at young couples and expecting them to have more children. It is a matter of poor social infrastructure that allows people to feel safe enough to have children."

"At the moment, people are unhappy with the environment that they will have to raise a child in and until that improves, the birth rate will not recover," she said.

Babies help out in a nursing home

Japan has long had a shortage of places at nurseries for working parents, which is ironic given that there are so few children, Hama pointed out, while school events, sports teams and after-school groups also cost money.

Government 'divorced' from reality

A major cost is associated with "juku" extra classes to ensure that a child gets into a good high school and then a good university.

Higher education typically lasts four years in Japan and can be a major drain on family resources, even if the child works part-time.  

And with salaries largely unchanged in more than a decade and day-to-day costs rising with inflation, the pressures are greater than ever, Hama said.  

"It is typical that another government in a long line of governments has reached the conclusion that if they throw enough money at the problem, then it will resolve itself," she said, adding: "They are completely divorced from the reality of ordinary Japanese people and, I fear, do not feel their insecurities, the fears and their needs.

"Until we have a government that does recognize the needs of the public, then this situation will never change."

Edited by: Srinivas Mazumdaru

Julian Ryall
Julian Ryall Journalist based in Tokyo, focusing on political, economic and social issues in Japan and Korea