Japan to offer families ¥1 million per child to leave Tokyo

Will the cash payment be enough to entice young families to leave Tokyo to bolster rural parts of Japan? Photo / Getty Images

Japan is planning to sweeten the financial incentive for parents who opt to move out of Tokyo as the government attempts to reverse decades of demographic decline, economic migration and the lure of the world’s biggest metropolis.

Officials familiar with the plan say the government will try to tempt families to relocate with a generous payment of up to ¥1 million ($12,200) per child if they swap overcrowded Tokyo for municipalities outside the city and its surrounding prefectures. The figure is more than triple the ¥300,000 on offer under an existing scheme in place since 2019.

The increased payment per child is only part of the government’s commitment to encouraging young families to leave Tokyo. Families that relocate are already being offered as much as ¥3m in one-off financial support, and can receive even more if they start a business.

Those that take the money must embrace the provincial life for a minimum of five years, or refund the state.

Japan’s shrinking and ageing population and the migration of younger people to the capital have disproportionately hit the regions beyond Tokyo, Osaka and a handful of other major cities.

Many rural towns and villages have been hollowed out, their businesses starved of customers and available staff. The estimated glut of empty homes in Japan — dwellings that often lie deliberately unclaimed by heirs — is expected to reach about 10m in 2023.

At the same time, Tokyo’s status as the prime magnet for economic activity and migration has grown. In 2021, despite the slowdown caused by the pandemic and the supposed new popularity of remote work, the average price of a new condominium in Tokyo, according to the Real Estate Economic Institute, surpassed the peak set at the height of Japan’s property bubble in 1989.

About 1,300 Japanese municipalities have already signed up to host migrating Tokyoites. According to government sources, just under 2,400 people took advantage of the relocation payment in fiscal 2021 — a figure that amounts to about 0.006 per cent of the 38m population of greater Tokyo.

The websites of the municipalities attempting to attract newcomers combine sales pitches for their rural charms with revealing honesty about their situation. Umaji village in Kochi prefecture (population 820) touts its provision of a free day nursery “and, of course, no children on the waiting list”. The nearby town of Tano offers the lure of a rare sun-dried salt factory, but notes that 42 per cent of the local population is over 65 years old.

The rural municipalities are further assisted by Japan’s state-owned broadcaster, NHK, which heavily promotes the idea of moving to the countryside in a regular show that follows the lives of those that have made the leap.

“We’ve watched that show, and naturally you think about doing it,” said Erika Horiguchi, a working mother who moved into a flat in central Tokyo with her husband and daughter in 2018 but who has no intention of swapping the city for the provinces.

“My husband left Aomori prefecture when he was young because he knew it would be harder to find work there. There is a reason that Japanese [people] are coming to Tokyo, and I don’t think the government can change that.”

Online, the reaction to reports of the government’s ¥1m-per-child relocation offer was met with similar scepticism.

“It sounds like a lot of money, but it is not enough to really make anyone decide to have children,” said one post.

The government’s move to encourage people to relocate comes as it worries over Japan’s below-replacement-level birth rate — a demographic reality for several decades, and one stubbornly resistant to a succession of efforts to encourage the creation of larger families.

Japan’s baby cohort is also shrinking more rapidly than previously forecast. In 2021, the number of births in Japan fell to just over 811,000. Forecasts based on the first nine months of 2022 suggest that the number will have fallen to below 800,000 for the first time since records began in the late 19th century.

In its comprehensive forecasts for future population size published in 2017, the government-affiliated National Institute of Population and Social Security Research did not see that line being crossed until 2030.

© Financial Times