Japan’s births fell to a record low of 720,988 in 2024, according to health ministry data, marking the ninth consecutive year of decline and 5% down on the previous year. It’s a stark reminder that, for all Japan’s efforts to promote childbearing, the country’s future is still destined to be defined by rapid ageing and a dwindling of its population. 2025 sees Japan’s post-war baby boomer generation now approaching its late 70s—the long foreseen “2025 Problem”–which is expected to drive medical and care costs higher and higher.
Like in South Korea, demographic trend data nonetheless also tells us that successfully promoting marriage and childrearing can work, which is seen as vital for Japan where relatively few babies are born out of wedlock in comparison to many Western countries. Marriages have also been in decline and, although 2024 saw a slight 2.2% increase in marriages, the fear is this is not indicative of a sustainable trend and potentially only driven by post-pandemic effects.
So what is the Japanese government doing? From an AI-powered matchmaking app to a 4-day workweek option for government employees (both policies from Tokyo Governor Koike), Japan is certainly taking steps in the right direction but do they help reset the thinking on parental rights or address the need for economic stability and wage growth? If Japan cannot raise its birth rate from 1.2 back up to 2.1, there is a risk of an unprecedented strain on the country’s future economy and a colossal burden on its shrinking, younger generation.
Japan will need to fill jobs not just to keep its economy moving and military in working order, but also to support the ageing population. It cannot rely on foreign migration or sheer innovation alone. While it may be a big business opportunity to develop leading technologies that the rest of the world can later adopt (the West is potentially seeing the same future trend on the horizon), we are already seeing low birth rates leading to lower patent applications as innovation is also under threat. Add to this the soaring cost of medical and care costs that will drive a need for better hospitals, more nursing homes, more carers and—ultimately—more money.
Japan’s population will fall dramatically, from 124 million in 2023 to 63 million by 2100, if current and future measures are not successfully implemented. It can be expected to lose rural communities and municipalities, putting local crafts and cultures at risk too.
If young people are to be encouraged to marry and raise children—which the government must promote—it is essential for job opportunities to be improved, the gender gap to be closed, and work-life balance boundaries to be recognised and enforced. Businesses should be compelled to encourage their workforce to raise families and lay out clear benefits and policies to follow through. From the right to paternity leave, flexibility over schedules, or even additional financial support, future parents should feel economically and emotionally secure to pursue raising a family, which ultimately benefits both the government and the economy.
It’s been shown that there’s a $2.50 return for every $1 spent on parental leave, and it’s not hard to see how supporting your own workforce’s parents through better work-life balance and equal opportunities helps them become more dedicated to their work and company, helping improve worker loyalty and productivity as a result.
Too Big to Care?
Here at SVL we believe a successful business is founded on core values that inspire how a company works and how its work is seen and felt. As part of this, we believe empowering parental rights and equality at the core of workplace culture are vital and we invite you to read our President & Co-Founder Glen Wood’s book, Too Big To Care, to learn more.
