Photo for representation
In a bid to improve its declining birth rate, Japan is offering extra cash to people to expand their family. According to a report in Japan Today, the country’s Ministry of Health, Labour and Welfare provides a Childbirth and Childcare Lump-Sum Grant to new parents, which currently stands at 420,000 yen (Rs 2.52 lakh). The ministry plans on increasing the amount to 500,000 yen (Rs 3 lakh) to incentivise more people to have kids. The Japanese Health, Labor and Welfare Minister Katsunobu Kato met Prime Minister Fumio Kishida to discuss the proposal. As per the report, the 80,000-yen boost would be the biggest increase ever for the Childbirth and Childcare Lump-Sum Grant, and the first one since 2009. The proposal is expected to come into effect in the 2023 fiscal year.
Why is Japan’s birth rate declining?The Asian giant’s birth rate has been falling for the past few years due to a variety of reasons such as economic uncertainty and families choosing to have fewer kids, as per a World Economic Forum report. This, coupled with the high percentage of elderly citizens in the country, is fast becoming a matter of concern for the Japanese government. According to the country’s population data for 2021, the number of births in the year fell to 811,604, the lowest since the survey began over a century ago. The average fertility rate in Japan stood at 1.3 in 2020.
Will the move to hike Childbirth and Childcare Lump-Sum Grant help?
Not really. While the Childbirth and Childcare Lump-Sum Grant is funded through Japan’s public insurance system, as per Japan Today, the costs of childbirth have to be paid out of pocket. The nationwide average childbirth cost is approximately 473,000 yen. This means that even after the proposed hike in the lump-sum grant, there would be less than 30,000 yen leftover for new parents.
Furthermore, about 200,000 women in Japan leave employment each year due to childbirth, according to SDGs and Japan, a 2020 report by the JICA Ogata Sadako Research Institute for Peace and Development. This causes an economic loss of 1.2 trillion yen on a nominal GDP basis, further creating an imbalance in the workforce. The report also stated that the lack of supportive structures for women in the workplace enforces the idea that women need to take time off work to raise their kids. This in turn is causing a lot of women to put off marriage and children in favour of their career, further leading to a decline in the birth rate.
While the proposed increase in the Childbirth and Childcare Lump-Sum Grant can benefit some parents, for many it will not solve the core issues of work-life balance and economic uncertainty.