Financial Incentives as Japan Faces Aging Demographic

Already the world’s oldest country, Japan continues to confront aging demographic challenges. As a result of exponential increase in life expectancy coupled with an all-time low birthrate, its population has fallen by nearly one million in the last five years. Although the government is seeking extreme measures to lift the country out of stagnation, experts expressed that avoiding implications from this population crisis is virtually impossible.

Since in office, Prime Minister Shinzo Abe has made this pressing issue a priority. However, policies such as urging businesses to increase employment and advancement opportunities for the female workforce have shown limited success thus far.  Recently, a program is launched where new parents are offered a monthly payment of $300 for every newborn until they reach the age of 15. In conjunction with the economic inducement, the government is also providing additional state-supported day care and tuition waivers, in hopes of increasing the appeal of parenthood. Unfortunately, fiscal policies can only go so far.

Deeply rooted are cultural issues that are discouraging family expansion. Traditionally in Japan, there is a heavy reliance on mothers to perform household duties including but not limited to child-rearing.  With fear of isolation from society and overwhelming pressure to maintain a household, women are increasingly choosing career advancements over child bearing in today’s society. With that being said, until domestic burdens are lifted from the roles of mothers, financial compensations might not be the most compelling incentive to bring the declining population to a halt.