Photo/Illutration A newborn baby at a hospital (Asahi Shimbun file photo)

Shocked by the record low fertility rate of 1.57 in 1989, the government embarked on a number of emergency measures to lift the birthrate.

The result?

The fertility rate, or the average number of children a woman is expected to give birth to in her lifetime, continued to decline, reaching 1.3 in 2021.

And the number of births in 2022 fell under 800,000 for the first time.

Such numbers paint a bleak future for the nation, especially its senior citizens.

Katsunobu Kato, the welfare minister, said the nation faced “a crisis that will greatly shake the very foundation of the economy and society.”

The crisis appears more dire today.

Takuya Hoshino, a senior economist at Dai-ichi Life Research Institute, has predicted that Japan’s working population will shrink to under 63 million in 2040 from about 69 million in 2019.

That will, in turn, pull down the gross domestic product growth rate to under 0.5 percent in the 2030s, and economic shrinkage in the following decade, according to Hoshino.

A 2019 government estimate of future pension payments projected a 20-percent decrease in fiscal 2047 over the amount paid in fiscal 2019.

But that projection was based on the precondition of high economic growth as well as population trends that did not take into account the fast pace at which births are actually decreasing.

Future pension payments will inevitably be even lower than the government’s estimate.

The declining population will also leave a huge gap in the number of workers needed to care for elderly people.

The health ministry estimated that in fiscal 2040, when the elderly population will reach its peak, about 2.8 million care workers will be needed.

But in fiscal 2019, there were only about 2.11 million care workers.

The falling birthrate means there will be even fewer people available to work in the elderly care sector.

Yumiko Watanabe, chair of Kidsdoor, a Tokyo-based nonprofit organization providing educational support to children, said the key is to reduce the financial burden on young people so that they do not abandon plans to have children.

That would require a different approach from what the government is planning.

The Kishida administration is pushing for an increase in child allowances and improvements in the quality of day care centers to stem the declining birthrate.

The Cabinet Office analyzed the relationship between the income gap of young people and the falling birthrate.

According to the results of the study released in February 2022, couples with a household income under 5 million yen ($37,000) were increasingly choosing not to have children.

The study compared two years—2014 and 2019—for households headed by an individual between 25 and 34 who had children.

In 2014, 26.9 percent of the households with incomes under 5 million yen had children, but by 2019 the figure had fallen to 15.9 percent.

In contrast, the ratio of couples with a household income exceeding 8 million yen who had children increased from 4.5 percent in 2014 to 7.1 percent in 2019.

The Cabinet Office concluded that one way to deal with the falling birthrate was to increase the household income of those between 25 and 34 who are in their prime marriage and childrearing years.

Easing the financial burden could be achieved by moving away from the traditional Japanese college “scholarship” that is, in fact, a loan, and by providing grants for college that do not have to be repaid.

Watanabe said young people facing long-standing debts from college loans would likely abandon plans to marry and have children.

“If unprecedented measures are not taken over the next 20 years, the nation will lose its last chance” to stop the falling birthrate, Watanabe said.

She called for exempting college loan repayments for those who marry and have children as well as to make university and occupational schools tuition-free.

(This article was written by Ryuichi Hisanaga and Keiichi Kitagawa.)

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