Unit 07 Kickoff Paper:Measures to Address Japan’s Low Birthrate and Regional Revitalization ──An Economic Approach

Tatsuo Hatta
Asian Growth Research Institute;
Center for Policy Analysis, Keizai Doyukai

 “Birthrates in Japan differ between regions, and any national measures intended to improve its birthrate have to take this fact into consideration.”

 Hiroya Masuda and the Japan Policy Council in 2014 made the best known proposal of improving birthrates following this line of thinking. But its proposal is based on a misreading of the facts. 1)

1) Hatta (2015a; 2016), Nakagawa (2015).


 In this edition of SPACE NIRA, Masayuki Nakagawa (2016) has clarified factors that resulted in this misreading. Wataru Suzuki (2016) proposes reform of the system of regional public finances as a means of improving the birthrate.

 The Masuda Report (2014) argues that because Tokyo’s birthrate is low and regional area’s high, promoting the migration of young people from Tokyo to regional areas would increase the birthrate in Japan as a whole.
 It is true that Tokyo’s birthrate is low. However, “moving young people from Tokyo to regional areas” does not constitute an effective measure to address the nation’s diminishing birthrate.
SPACE NIRA_Eng_KP_八田達夫先生_図_161116

 The figure above shows the total fertility rates of government-designated cities and Tokyo metropolis. As this demonstrates, Tokyo metropolis’ fertility rate is close to the lowest. But the fertility rates of large cities in the Greater Tokyo Area are high when compared to those of large cities in regional areas. Indeed, the fertility rates of Saitama City, Chiba City, Yokohama City, Kawasaki City, and Sagamihara City, which are all in the Greater Tokyo Area, are higher than those of Fukuoka City, Sendai City, or Sapporo City.
 Masuda’s assertions are therefore based on a fundamental misreading of the actual situation.

 Why, then, is the birthrate of the Tokyo metropolis so low? Hatta (2015a; 2016, p. 73) and Nakagawa (2015) advance the following explanation: Female students and new female graduates come to Tokyo from regional areas for education and employment. When these women marry and begin to have children, they move to suburban areas such as Chiba and Saitama in search of cheaper rents. 2)
For this reason, the birthrate of the Tokyo metropolis remains low, while the birthrates of the surrounding cities are higher. By contrast, in the case of the majority of other large cities in Japan the greater part of the suburban area is incorporated within the city itself, and hence birthrates are higher than they are in Tokyo, where the greater part of the suburban area is outside the metropolitan area.
 Nakagawa (2015) demonstrates using statistical data that in the case of both the Greater Tokyo Area and the Greater Sendai Area, the rate of marriage is high in suburban areas and low in the central city area. In this issue of SPACE NIRA, Nakagawa (2016) demonstrates that the same phenomenon can be observed in Fukuoka City and Sapporo City. This is to say that the tendency displayed by Tokyo is also displayed by Sendai, Fukuoka, and Sapporo. 3)
 Nakagawa (2016) identifies this singular disparity between fertility rates in Tokyo metropolis and the suburban cities in the Greater Tokyo Area mislead Masuda to believe that the Greater Tokyo Area’s birthrate is low while the birthrate in regional areas is high. Demonstrating that the birth rate discrepancy between inner city and suburbs is a general phenomenon which is also true of other metropolitan areas, Nakagawa shows that the migration of young people to regional areas would not be an effective measure to respond to Japan’s low birthrate.

2) Hatta (2015a) argues that while the birthrate of the Tokyo metropolitan area is low, that of the bed towns in the Greater Tokyo Area is high. Nakagawa (2015) uses statistical
     data to show differences in the marriage rate by age group between central cities and suburban areas in Japan.
3)In the case of Sapporo, however, the birthrate is low despite the existence of a relatively large greater metropolitan area.  Nakagawa (2016) indicates that the reason for
     this remains unclear.


 Suzuki (2016) goes on to show that improvement of the system of regional public finances would boost the fertility rate of the nation as a whole.
 According to Suzuki, when a city directs public expenditure toward measures designed to shorten waiting lists for childcare, “childcare refugees” flock in from the surrounding cities, which offsets the initial effect of shortening the list. When the number of children requiring childcare in a specific municipality increases, the consequent increase in expenses is not covered by government grants, resulting in an increase in net costs for the municipality, with the ultimate result that responses cannot be put in place in time. The consequence is that the wait for childcare places continues to be a serious problem in large cities discouraging the effort to improve the child-raising environment.
 Suzuki proposes that the fundamental solution to this problem is for the government to provide “model benefits” for child-raising support measures to each of the nation’s municipalities, enabling them to provide support for child-raising without financial burden. In this model benefit, the government would pay municipalities the full amount necessary for standard childcare services. As a result, municipalities would experience zero burden in implementing standard child-raising support measures, and would be able to provide for the increase in expenses for child-raising support measures due to population influx through increased support from the government, thus eliminating the problem of under-supply.
 Suzuki further indicates that the fact that the government’s subsidies are calculated, and hence only increase, two years after any increase in the number of children of childcare age in a given municipality leads to a delay in measures to respond to the issue of children waiting for childcare services. Because of this, the higher the population growth rate of the city, the more serious the problem of the childcare waiting list becomes.
 The adoption of appropriate fiscal measures to address this problem would allow municipalities to develop their childcare facilities as needed, with no concern over an influx of “childcare refugees.” All things considered, this could be expected to have a significant effect on efforts to respond to Japan’s declining birthrate.


  • Wataru Suzuki (2016), “Childcare and Measures targeting Japan’s Low Birthrate – What Effect Can the Decentralization of Authority Have on the Birthrate?” (SPACE NIRA Unit 07-B).
  • Masayuki Nakagawa (2015), “Tokyo contributes to Marriage in Japan – Decentralization of the Population would represent Excessive Intervention,” in Preparing for Aging Cities by offering Choices to the Elderly – Towards Separating Discussion of Regional Revitalization and the Low Birthrate in Japan, Report of the City Study Group, Japan Center for Economic Research, July, 2015, pp. 45-59 (In Japanese)
  • Masayuki Nakagawa (2016), “City Structure and Marriage: A Comparison of Sapporo City and the Greater Fukuoka Area” (SPACE NIRAUnit 07-A).
  • Tatsuo Hatta (2015a), “Questioning Regional Revitalization (Part 2): Removing Barriers to Immigration is the First Priority,” Nihon Keizai Shimbun, February 6, 2015 (In Japanese).
  • Tatsuo Hatta (2015b), “Balanced National Development” threatens Japan with Decline,” in The Issues in Question: Rapid Population Decline and The Disappearance of Small Municipalities in Japan, Jiji Press, Ltd., February 2015, pp. 64-67 (In Japanese).
  • Tatsuo Hatta (2016), “Regional Revitalization via a System for the Contribution of “Model Benefits” by the Government,” Japanese Journal of Health Economics and Policy, Vol. 27, No. 2, pp.71-84 (In Japanese).
  • Hiroya Masuda and The Japan Policy Council (2014), “The Impact of the List of 896 Regional Cities that might Disappear: 523 have Populations of 10,000 or Less,” Chuo Koron, Vol. 129, No. 6, June 2014, pp. 32-43 (In Japanese).