According to the Statistics Bureau of Japan, in 2021, 28.9% of Japan’s total population was at least 65 years old, marking a record high for the country. There were 14.78 million 0-14-year-olds in the same year, accounting for 11.8% of the total population, the lowest level ever recorded in Japan
Japan plans to boost financial support to households to move away from the capital to combat depopulation in other areas of the country, according to multiple local media reports.
To receive the benefits, families must move outside the greater Tokyo area, the rules state. Some could also receive the payment if the families relocate to mountainous regions, the scheme which has been joined by about 1,300 municipalities, states. Moreover, families must live in their new homes for at least five years and one member of the household must be in work or plan to open a new business during the period.
Half of the money for the scheme will come from the central government, and the other half from local municipalities, Kyodo had earlier reported.
Eligible families in the Tokyo metropolitan area will be able to receive 1 million yen ($7,700) per child starting in the fiscal year 2023 if they move to a disadvantaged local area — more than triple the 300,000 yen incentive already in place, the reports said.
The financial incentives highlight the challenges that Japan is facing with its low birth rate and long life expectancy.
Rural areas have seen rapid depopulation as the young move away for opportunities in cities, leaving the localities dotted with empty homes and contending with dwindling tax revenue.The increased support for children comes on top of a flat 1 million yen that families can get for moving.
Under the new proposal, a household with two children could receive 3 million yen in support if they left the Tokyo area.
Japan’s national government began the initiative to attract people to regional areas in 2019, allowing households who have lived in the central Tokyo metropolitan area for five years to apply for support funds if they move.
Families can continue to work remotely at their current job, work at a local small or medium sized business, or start a business in the local area — which would allow them to apply for even more financial support.
The scheme saw 1,184 household participants in 2021, compared to 71 the first year it launched, according to the Nikkei.
According to the Statistics Bureau of Japan, in 2021, 28.9% of Japan’s total population was at least 65 years old, marking a record high for the country. There were 14.78 million 0-14-year-olds in the same year, accounting for 11.8% of the total population, the lowest level ever recorded in Japan.
People living in 23 regions across Tokyo and local commuter hotspots will be eligible for the relocation money, according to a press release from the Kyodo news agency. The financial support is expected to be in place during fiscal 2023.
Recipients of the money must live in their new region for at least five years while being employed and anybody breaching those rules would be asked to return the money.Support is provided for children under 18 years old or those who are 18 but still in their final year of high school.
Goldman Sachs’ Naohiko Baba said last year that more needed to be done to preserve and increase Japan’s shrinking labor force.
Japanese corporations “need to propose a much higher salary to attract people with special skillsets and try to improve competitiveness against competitors abroad, especially in the Asian nations,” Baba told CNBC’s “Squawk Box Asia” in April 2022.
The support program started in 2019, and in 2021 2,381 people moved out of metropolitan Tokyo and claimed the funds, as reported by Kyodo.