Tokyo The words of Japan’s Prime Minister Fumio Kishida are drastic: This is “the last chance to reverse the trend of falling birth rates,” he said on Tuesday. In 2022, the number of children per woman of childbearing age fell to just 1.26 — the lowest on record.
Japan has reduced kindergarten waiting lists for children of working parents to a record low in just five years. But apparently that’s not enough. As an additional incentive, Kishida now wants to double the budget for child-rearing from the current 31 billion euros by 2030 – and thus to the level of Sweden, as the government claims.
In the first step, an additional 23 billion euros will be made available. This extends child benefit to high school students, upper income limits are abolished, and all children are guaranteed a place in kindergarten. The child-raising allowance will be increased to 100 percent of the basic wage, and the birth costs will be covered in full by health insurance in the future.
The move is part of Kishida’s promise to secure the middle class with a “new capitalism” after three decades of stagnating real wages and record corporate profits. The future strategy for children is an attempt to escape the threatening demographic trap.
For experts, however, Kishida does not go far enough with higher subsidies and thus teaches European countries a lesson: he promises more money from the state, while people primarily look at their income and the security of their jobs and lives.
Women need better jobs
Haruka Sakamoto, senior fellow at the Tokyo Foundation for Policy Research, praises the fact that Kishida has put the issue on the political agenda. “But it is necessary to change the social structure,” says the expert. Martin Schulz, chief political economist at the technology group Fujitsu and a member of an advisory board at Kishida, explains that in the Japanese context, in addition to reducing precarious part-time jobs, which account for almost 40 percent of jobs, one thing is above all important: “Women have to get better-paid work if the birth rate should rise.”
As a rule, in Japan, only households with a family income of more than eight million yen (53,000 euros) have more than one child. This value is just above what a two-person household currently earns on average. The potential is enormous because the inequality is still so great.
In the gender ranking of the World Economic Forum, Japan was 116th in 2022 – despite political calls for more women to be employed full-time. Politicians must therefore enforce quotas for women, says Schulz. But the government is reluctant to do so and is relying on more money.
Aging pioneer Japan is running out of demographic tricks
While many developed countries struggle with low birth rates, the problem is particularly acute in Japan. Because the third largest economy in the world is the first country in which the population is shrinking due to a lack of births. Since 2010, the population has already fallen from 128.1 million to under 125 million. And the pace is increasing.
Japan is threatened with aging.
(Photo: AP)
Japan lost 556,000 people in 2022, and the number is expected to drop below 100 million by 2056, the National Research Institute for Population and Social Security forecast in April. This is three years later than previously forecast because Japan is now allowing more foreigners into the country than before – but in relation to Europe it is still very few.
>> Read here: Working at retirement age – how Japan has tricked demographics so far
The economic side effects of demographic change are increasingly affecting Japan. Fewer and fewer people have to finance growing armies of pensioners, the welfare state and the national debt. The latter poses a particular risk for Japan, as national debt has now risen to around 250 percent of economic output.
The problem has long been recognized in Japan. There are no drastic savings, instead the increasing debt is stabilized by bond purchases by the central bank and social benefits are cut. After Kishida’s predecessor Shinzo Abe took office at the end of 2012, the government also focused more closely on the birth rate. So she increased the education allowance and took action – with success – against the then rampant shortage of kindergarten places.
Although the number of kindergarten children has recently risen to 2.8 million, waiting lists have shrunk from 26,081 children in 2017 to 2944 children in 2022, according to the Ministry of Health. In Japan, this theoretically allows both parents to work. Because many kindergartens have significantly longer care times than in Germany. “I can drop my child off at 7 a.m. and pick them up at 8 p.m.,” says a father who lives in northeast Tokyo. There are even facilities that are open 24 hours a day.
Exemplary kindergarten policy has so far failed to achieve its goal
But these advances have not encouraged young couples to have more children, which may also be due to the size of the grants paid so far. For small children up to three years of age, parents below a certain income limit currently receive the equivalent of around 100 euros per month in child benefit, from the age of three to 15 it is the equivalent of only 66 euros. So far, high school students have been left empty-handed. Kishida now wants to change that.
They used to symbolize the wish for boys to become strong like carp. Now this is also partly related to girls.
(Photo: AFP)
Politically, that’s a smart move. It is speculated that Kishida could dissolve parliament and call early elections later this month. He will only announce later how he intends to finance the higher social spending and the simultaneous doubling of the defense budget in the long term, for example through unpopular tax increases.
However, whether the package meets the reality of life in Japan is still open. Despite free public schools, the cost of education is high. Because when changing to better middle, high or university exams have to be passed, for which expensive tutoring schools prepare. In addition, as in other Asian countries, where the welfare state is weaker than in Europe, there are traditionally very few extramarital children – and the marriage market is extremely materialistically organized.
A study by researcher Sakamoto shows that men with an annual income of less than 20,000 euros have little chance of marrying in Japan. This group includes those who only finance themselves with part-time jobs. The realization of children’s desires is rather determined by the income, says the expert: “The higher the annual income, the higher the proportion of those who have children.”
For women, Sakamoto observes a development similar to that in Sweden, where better educated women have more children. For a long time, highly educated women in Japan remained single and therefore childless. “For women in their 20s or early 30s, the situation is the opposite,” says the expert. “Women with a high level of education and high income are more likely to marry.”
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