A low birthrate has prompted the Japanese government to provide tangible incentives for growing families. A new proposal would pay parents $3,400 per year per child in an effort to counteract the effects of an aging population. Japan's birthrate is currently among the lowest in the world.

At present, approximately 25% of the country's population is above age 65; by 2050, it could reach 40%. This dynamic could strain medical and social services, limit the employment pool and constrain economic growth.


The proposal would provide parents with the stipend annually until each child reaches high school. The measure comes from Japan's new ruling party – the Democratic Party of Japan – which took power in elections held last week.

Yet, aside from the obvious concern about whether $3,400 a year is sufficient incentive to have another child, there has been criticism of the proposal. First, of course, is funding: economist Yuri Okina asks where the money would come from.

Okina also raises the issue of childcare for working parents. Women will need a way to remain in the workplace after having children. Given that an aging population effectively shrinks the labor pool, putting more potential employees out of reach of the companies that need them.

The availability of daycare is particularly vexing – and the issue involves more than cost. Currently, 40,000 children sit on waiting lists, according to data from the Japanese government.

For families that were on the fence about having children, though, the incentive may help finalize the decision to have another. If money is an issue – and a little more would make the difference – the proposed program could solve the problem.

Seems strange? Well, the plan is not as bizarre as a German cruise operator's offer earlier this year to refund fares to women who become pregnant on their honeymoons. Also, the odds of payment are higher, and the benefits are larger and last much longer.

It will take time for the effects of this proposal (if adopted) to become noticeable in the Japanese economy. With the prospect of nearly half the population being senior citizens by the middle of the century, however, it's probably prudent to start soon.


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