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Deaths haveoutpaced birthsin Japan for more than a decade, posing a growing problem for leaders of the world’s third-largest economy. They now face a ballooning elderly population, along with a shrinking workforce to fund pensions and health care as demand from the aging population surges.

Japan’s population has been in steady decline since its economic boom of the 1980s and stood at 125.5 million in 2021, according to the most recent government figures.

Its fertility rate of 1.3 is far below the rate of 2.1 required to maintain a stable population, in the absence of immigration.

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“In thinking of the sustainability and inclusiveness of our nation’s economy and society, we place child-rearing support as our most important policy,” he said, adding that Japan “simply cannot wait any longer” in solving the problem of its low birth rate.

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But money alone might not be able to solve the multi-pronged problem, with various social factors contributing to the low birth rate.

Japan’s high cost of living, limited space and lack of child care support in cities make it difficult to raise children, meaning fewer couples are having kids. Urban couples are also often far from extended family in other regions, who could help provide support.

In 2022, Japan was ranked one of the world’s most expensive places to raise a child, according to research from financial institution Jefferies. And yet, the country’s economy has stalled since the early 1990s, meaning frustratingly low wages and little upward mobility.

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It’s a familiar story throughout East Asia, where South Korea’s fertility rate – already the world’s lowest –dropped yet again last yearin the latest setback to the country’s efforts to boost its declining population.

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