Increasing Japan's Birthrate

Japan’s government is desperate to boost its sluggish birthrate (1.37 in 2008) [1], and relies heavily on financial incentives to do so. Today, I’ll discuss the lump-sum birth payment, which is one of several such programs. The government called a recent increase in the payment an “emergency response” to the low birthrate [2].This “emergency response” raises two important questions: how far will this one-time payment of 420,000yen per child go for expectant parents? And, more significantly, is financial support really the best way to raise Japan’s low birthrate?

The lump-sum payment fills a gap in Japan’s regular health insurance; because the health insurance system does not cover healthy childbirth, the Ministry of Health, Labor, and Welfare offers parents the lump-sum at the birth of each child. As of October 1, 2009 the government will pay up to 420,000yen to the medical establishment where the child was born. If medical bills are less than the upper limit, parents apply to receive the remainder; if costs are higher, the parents must pay the further costs out-of-pocket [3]. Prior to October 1, 2009, the maximum government payment was 380,000yen, and parents had to pay all costs out-of-pocket before receiving the government reimbursement.

While parents certainly appreciate the extra 40,000yen that they now receive per birth, the increase can hardly make a significant difference to most families. According to a poll conducted in early 2009, the average hospital charge for giving birth was 424,000yen. This means that the new rate covers, or almost covers, the fees associated with giving birth for many mothers [4]. However, the increase will not defray other costs of pregnancy, such as pre-labor doctor visits and other personal expenses, not to mention the money required to feed, clothe, and educate the child.

Adults of child-bearing age are hyper-sensitive to the economic burden of raising a child. A full 86% of the respondents to a government survey of childless adults said they wanted to have 2 or more children, but most of these also felt that they would be unable to have as many children as they would like [5]. Far and away, the number one reason for this was the financial difficulties [6].

The survey data also suggest the depth of these economic difficulties. 75% of the male and 81% of the female respondents indicated that an annual household income of at least 5 million yen is necessary to have even one child [7]. However, this income is far out of reach for many families. Japan’s median household income is less than 4.6 million [8] and because incomes rise with age, a significant proportion of those below the median must be young families.

This financial pictures indicates that financial incentives should be a key government tool to increase the birthrate, but the new 420,000yen payment does not come close to closing the yearly income gap for families at our below the median income; much more ambitious measures will be required to make a real difference.

1. Asahi Shimbun, 08nen Shusshouritsu 1.37, 3nen Renzokuzou Hadome ha Kakarazu , June 3, 2009 [cited 2009 October 14]; Available from: http://www.asahi.com/edu/kosodate/news/TKY200906030278.html

2. Ministry of Health, Labor and Welfare, Anshin shite Shussan wo shite itadaku tame, Shussan Ikuji Ichijikin ni tsuite ha, Ika no you ni Minaoshimasu 2009 [cited 2009 October 5]; Available from: http://www.mhlw.go.jp/bunya/iryouhoken/iryouhoken09/07-1b.pdf.

3. Shussan Ikuji Ichijikin no Shikyuukaku to Shikyuu Houhou ga Kawarimasu September 14, 2009 [cited 2009 October 5]; Available from: http://www.kyoukaikenpo.or.jp/8,24316,39.html.

4. Takahashi, Y., Shussan Hiyou, Heikin 42 Man En Saikou ha Tokyo, Saitei ha Kumamoto, in Asahi Shimbun. May 25, 2009 [cited 2009 October 13]; Available from: http://www.asahi.com/health/news/TKY200905230096.html

5. Ministry of Health, Labor and Welfare, Shoushiki ni Kansuru Ishiki Chousa Kenkyuu. 2004 [cited 2009 October 8]; Available from: http://www.mhlw.go.jp/houdou/2004/08/h0813-2/dl/12.pdf. Figure 4-6 p. 59.

6. Ministry of Health, Labor and Welfare, Shoushiki ni Kansuru Ishiki Chousa Kenkyuu. 2004 [cited 2009 October 8]; Available from: http://www.mhlw.go.jp/houdou/2004/08/h0813-2/dl/12.pdf. Figure 4-7-1 p. 60.

7. Ministry of Health, Labor and Welfare, Shoushiki ni Kansuru Ishiki Chousa

Kenkyuu. 2004 [cited 2009 October 8]; Available from:

http://www.mhlw.go.jp/houdou/2004/08/h0813-2/dl/12.pdf. Figure 4-8 p. 62

2. Ministry of Health, Labor and Welfare, Kaku Sedai no Shotoku Nado no Joukyou 2004 [cited 2009 October 13]; Available from: http://www.mhlw.go.jp/toukei/saikin/hw/k-tyosa/k-tyosa06/2-1.html .