Population Strategy without Firm Basis

Prime Minister Fumio Kishida announced his plan called “Children’s Future Strategy Policy” for dealing with Japan’s declining population. Recognizing urgency of turning current trend around, Kishida offered “acceleration plan,” a policy package for fixing the problem of declining birthrate by 2028, which included subsidies for the families with kids. Immediate skepticisms were raised, however, against his failure in showing credible budgetary resources. Experts on the demographic study pointed out a misguidance of the policy, arguing that the measures wrongly focused on the living kids instead of new-coming babies. 

The acceleration plan proposes removing the income cap for the families receiving child benefits, which recipients will be including the families with a high school student in addition to them with a mid-school student or younger. Every child between the ages of 0 and 2 will receive ¥15,000 monthly, and she or he between 3 and 18 will get ¥10,000. The amount will be raised to ¥30,000 monthly for the third child or beyond. For the families with a student in higher education, student loan and scholarship will be reformed for easier applications. The system of nursery school will also be improved for the workers with little kids.

Recommending all the fathers to take time for raising new-born babies, the plan aims to a society in which male workers’ recess for a new baby is nothing strange. It sets the target of 85% of all male workers taking the new-baby recess by 2030, and offers public financial support to guarantee practically 100% of the income. Mid- or small businesses with additional measures for the new-baby recess will receive subsidy from the government.


Those policies require certain amount of budgetary resource to be viable. One thing clear is that the plan demands yearly ¥3.5 trillion for the concentration period between FY2024-26. While the plan assumes ¥1.5-1.6 trillion for financial supports for children, ¥700-800 billion for improving nursery services, ¥700-800 billion for the families with double income and ¥500 billion for poverty or abuse on child, there is no explanation on how the government will accommodate the budget. First of all, Kishida denied the possibility of raising tax, including consumption tax, and stressed the necessity of reforming the whole structure of current expenditures. One option on the table is creating new budget for child support, dug up by cutting social security budget or reforming social insurance system. Considering the social insurance system supported by the payment of both employers and employees, increasing of the payments may contradict the current governmental policy of raising salary of the workers. Although the plan demands the government finding stable financial resource by the end of FY 2028 and offers bridge bond until then, the anxiety about possible additional burden on old agers cannot be removed.


Kishida’s seriousness about the decline of children’s popularity, described as “the biggest crisis we are facing” in the strategy policy, is not baseless. Ministry of Health, Labor and Welfare released the annual population trend statistics of 2022, which indicated Japan’s total fertility rate – the average number of children a woman will give birth to in her lifetime – marked a record-tying low of 1.26. While a nation needs 2.07% to maintain its population, the statistics shows consecutive drops for recent seven years. The number of new-born babies in 2022 was 770,747, falling below 800,000 for the first time.


One of the biggest questions on Kishida’s demographic policy is whether the measures for existing kids are effective enough to change the negative trend. According to the study by Kenji Kamata, Assistant Professor at Meiji University, 90% of the factors causing decline of fertility rate is the non-marriages or late marriages and the rest of 10% is decline of the number of children each married couple has. Supporting policies for raising children is not contributing to improve the birth rate. Rather, closing the gap between the regular and non-regular employment or fixing disparity between male and female workers would be more crucial and urgent to change the course of demographic downturn.

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