A Japanese Town Figures Out How to Raise the Birth Rate

Thanks to Duane Miller for pointing me to a story in the Economist about a small town in Japan that has figured out how to double its birth rate. This didn't require a Sex Tsar like Spain created last year, nor did it involve billboards emphasizing how important it was to Singapore for people to have babies. Rather, it was an old-fashioned formula similar to the one that the French have been using for a long time--subsidize the cost of having children.

Mrs Fukuda will receive a “celebratory” gift of ¥300,000 ($3,530) when she gives birth. A subsidised baby-sitting service is available for just ¥1,800 a day, along with subsidised carseats and other baby accessories. When her children reach secondary school, she will receive ¥90,000 a year for each one who attends. In theory, this stipend is to cover the cost of getting children to school, especially for people who live relatively far away. And whereas usually all but the poorest and the old in Japan have to pay 30% of their health-care bills (with the national government picking up the rest), in Nagicho the local government pays the 30% for children.

For many years the French system of similar incentives seemed like a failure because the French birth rate remained right around replacement level at a time that the government was hoping for something higher than that. Now, of course, replacement level fertility looks pretty high in Europe! And, to be sure, it would look great in Japan, if every town were to replicate this model. Note that one resident interviewed for the story did not believe that the incentives were the main reason for the increase in the birth rate. I would argue that a community that thinks like this has a culture that is oriented toward families, rather than just individuals getting ahead--and typically at the expense of women. That is why they put the incentives in place, so the explanation is perhaps more complex than it seems at first glance.