Japan’s Prime Minister Announces ‘Last Chance’ Plan to Reverse Declining Birthrate

Japan's Prime Minister Fumio Kishida speaks during a late-night press conference during the G-7 Summit Leaders's Meeting in Hiroshima, Japan, on May 19, 2023. Japan Pool/JIJI Press/AFP via Getty Images

Japan’s leader unveiled a plan on June 13 to reverse the country’s falling birth rate, warning that the nation has entered its “last chance” period to address the crisis and avoid facing a “shrinking” society.

“Now is the last chance to reverse the downtrend in childbirth by the 2030s,” Prime Minister Fumio Kishida said at a press conference.

The number of newborns in Japan fell to 770,747 in 2022, down 40,875 from the previous year and the lowest since the country began keeping records in 1899, according to the Health Ministry data released on June 2.

Japan’s fertility rate—the average number of children born to a woman in her lifetime—fell to 1.26 in 2022 from 1.3 in 2021. That number is far below the 2.07 rate necessary to sustain a stable population.

Kishida said the low birthrate is “a massive problem” that requires urgent action from the government, given its effects on the country’s economy and society.

“Without arresting the fast-declining birthrate and populations, Japan’s economy and society would shrink, making it difficult to maintain social security systems,” he said.

Kishida said the government intends to allocate about 3.5 trillion yen ($25 billion) over the next three years for a comprehensive child care package and to provide support for individuals taking child care leave.

Staff working in a nursery room at Jikei Hospital in Kumamoto, Japan, on June 10, 2022. Philip Fong/AFP via Getty Images

The government didn’t specify the funding source for these measures. Kishida ruled out the possibility of a near-term tax increase and instead proposed addressing the funding gap by issuing special child care bonds.

According to a draft proposal, the plan includes government subsidies for childrearing, student loans for higher education, and increased access to child care facilities.

It also proposes promoting gender equality and increasing government assistance to businesses to encourage male employees to take paternity leave.

“While diverse views about marriage, childbirth and childrearing should be respected, we want to make a society where young generations can marry [and] have and raise children as they wish,” Children’s Policies Minister Masanobu Ogura said on March 31.

“The basic direction of our measures to tackle low births is to reverse the trend of declining births by supporting individuals’ pursuit of happiness.”

So far, government efforts to encourage people to have more babies have had a limited impact despite subsidies for pregnancies, births, and child care.

Labor Shortages

The country’s population is expected to fall below 100 million by 2050, according to the Japan Meteorological Agency. Data released by the Cabinet Office show that the aging population is also a prominent issue.

As of October 2019, the country’s total population was about 126 million, 28.4 percent of whom were older than the age of 65.

According to the ASEAN+3 Macroeconomic Research Office (AMRO), Japan’s working-age population dropped to 75.3 million in 2018 from 87 million in 1993, resulting in a severe labor shortage in the country’s economy.

“Aging population, coupled with a low fertility rate, results in a declining working-age population,” AMRO stated in a 2019 report.

“This not only hurts a country’s growth potential but also [negatively affects] Japan’s fiscal sustainability due to increases in social expenditure such as higher pension and healthcare spending.”

Teikoku Databank, a Tokyo-based market researcher, surveyed more than 1,100 organizations in May 2022, discovering that 45.9 percent of respondents faced a labor shortage, Nikkei Asia reported.

The Associated Press contributed to this report.