Japan is on the brink of a demographic catastrophe.

The country’s stubbornly low birth rate is not a new issue, but the stark message delivered this week by Prime Minister, Fumio Kishida, hammered home just how high the stakes are.

“Our nation is on the cusp of whether it can continue to function as a society,” he warned.

In a country where adult incontinence pads outsell babies’ nappies, it’s “now or never”, he added, to fix Japan’s demographic crisis.  

Falling birth rates and an ageing population aren’t exclusively Japanese problems. China’s population shrank in 2022 for the first time since the 1960s while South Korea recently broke its own record for the world’s lowest fertility rate. A host of European countries, including Spain and Italy, are concerned about low birth rates. 

But the problem is far more pronounced in Japan, home to the oldest population in the world, after the tiny state of Monaco. Japan is recording fewer births than ever before, with an estimated 800,000 last year, compared to two million in the 1970s. 

This matters. An increasingly inactive workforce is causing acute labour shortages, stifling economic growth and leaving the elderly with no one to care for them. What’s more, as Bill Emmott, a Fellow of Tokyo College, told Reaction, a shortage of youth will hinder recruitment for the country’s armed forces. Since a big increase in the defence budget has been Kishida’s signature initiative, “this may be the real reason for his attention to child care.”

Kishida wants to double the national budget for child-related programmes. But will this suffice? Public spending on childcare provision has increased substantially in recent years yet births have continued to drop. 

To find solutions, we need to understand the root causes of the demographic crisis. 

Job insecurity, and the rising cost of living, is deterring many from having kids. As Emmott points out, 40% of workers in Japan are on short-term, often part-time, contracts – “double the level of 1990, when Japan’s economic ‘bubble’ burst and the stagnation began.” Without a full-time contract it’s very hard to start a family or take out a mortgage. 

The rise in women entering the workforce – under former PM Shinzo Abe’s “womenomics” policy – also plays a part. Despite the increasing number of economic opportunities for women, traditional domestic gender roles – which expect women to be the ones to quit their jobs to take on the bulk of child-rearing responsibilities – persist. This leaves a growing number of working women reluctant to settle down. 

Another crucial factor is Japan’s strict immigration laws – which have only slightly relaxed in recent years. About 3% of Japan’s population is foreign-born, compared to 15% in the UK. Despite the critical need to plug gaps in the workforce, preoccupations about preserving “ethnic homogeneity” persist among much of the population.

Technology – such as the burgeoning industry of “carer robots” – can mitigate some problems arising from an ageing population. But this is a buffer, not a fix. Nor is funnelling money into child programmes likely to be enough. 

Rather than conceptualising improving the birth rate as a way to fix Japan’s economic woes, perhaps policymakers should approach it the other way round: tackle Japan’s sluggish economy and the birth rate may well start to fix itself. 

“Job insecurity is, surely, susceptible to public policy”, says Emmott. “Addressing this would probably have a bigger effect than a few more nurseries.”

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