A Small Hokkaido Town Just Announced the Prefecture's Biggest Baby Bonus. Can It Actually Work?
Yoichi Town will pay families ¥1 million (~$6,600) per child from the third birth onward, the highest municipal birth bonus in all of Hokkaido.
Yoichi (余市町), a town of roughly 17,000 on Hokkaido’s western coast, announced on Feb. 24 that it will double its birth celebration payments (shussan iwaikin) starting in fiscal year 2026. The third-child-and-beyond payout jumps from ¥500,000 to ¥1,000,000. First and second children go from ¥50,000 to ¥100,000.
The expansion is the centerpiece of the town’s FY2026 budget, a ¥11.2 billion general account, up 3.7% from the prior year. Hokkaido’s Child Policy Bureau confirmed it is the highest municipal birth bonus in the prefecture as of FY2025.
Why it matters: Japan is in the grip of a demographic crisis that former PM Kishida called the country’s “last chance”to reverse. Births fell below 700,000 for the first time in 2024, just 686,061, a ninth consecutive record low. The national fertility rate sank to 1.15. Hokkaido’s was even worse: 1.01.
Yoichi’s announcement arrives alongside new research suggesting that municipal choices, not just national policy, may matter more for birth rates than national transfers.
The research: A study covering all 1,741 Japanese municipalities, published in the Journal of the City Planning Institute of Japan, calculated local “desired birth rates” and found enormous variation, from 0.81 to 1.97, a 143% spread between the lowest and highest. Only 15% of municipalities can realistically hit the national target of 1.8 even under optimistic assumptions. Under conservative assumptions, none can.
The strongest predictor by far: child welfare spending. Municipalities that allocate a larger budget share to child services show dramatically higher desired birth rates, with a regression coefficient of 0.47, dwarfing all other factors. Kasuga Town in Fukuoka pushes this to an extreme, directing roughly 41% of its municipal budget to child welfare, about triple what comparable cities spend.
Other significant factors: working close to home (0.19 SD higher desired rates), car commuting flexibility over rigid train schedules, kindergarten access, and community festival culture, which likely reflects the informal childcare support networks that emerge from repeated neighborhood interaction.
The success stories: The research isn’t just theoretical. Several Japanese municipalities have already demonstrated that local policy can move fertility rates:
Akashi (明石市), west of Kobe, hit a fertility rate of 1.65 against a national 1.3 under former mayor Fusaho Izumi, who doubled child welfare spending by cutting public works, not raising taxes. Akashi offers free medical care to age 18, free school lunches, free nursery for families with 2+ children, and free diapers delivered by midwives.
Nagareyama (流山市), a Tokyo suburb, reached 1.50 vs. the national 1.26 by building station-based childcare pickup systems that let parents commute to central Tokyo while children are shuttled to daycare. It’s working: 29% of its elementary school families have three or more children.
Nagoya’s metro area shows no urban fertility penalty, unlike Tokyo and Osaka, which both show identical -0.26 coefficients. The difference traces to fiscal priorities: Nagoya-area municipalities spend significantly more on family support.
The big picture: Across Japan, shrinking rural towns are locked in an escalating bidding war for young families, offering ever-larger cash bonuses, free childcare, and housing subsidies to stem outflows. The national government itself has pledged ¥3.6 trillion (~$22.3 billion) annually in child-rearing support, with phased implementation beginning in FY2026.
But an Asahi Shimbun poll found 73% of respondents don’t believe national measures will halt the declining birth rate, skepticism grounded in three decades of similar initiatives producing minimal results. The research suggests why: time poverty from commuting, spatial constraints from housing costs, and social infrastructure from community networks matter as much as income transfers. These require local control over zoning, transit, public space, and budgets, levers that national policy barely touches.
By the numbers:
16,954: Yoichi’s population as of January 2025, down from ~26,600 in 1980, projected to fall to ~9,600 by 2050
40.8%: Share of Yoichi residents aged 65 or older, vs. ~30% nationally
7.2%: Share of Yoichi’s population that are women aged 20–39, vs. 10.3% nationally
The backstory: Yoichi’s mayor, Keisuke Saito (齊藤啓輔), is a former Foreign Ministry official who served at the Japanese Embassy in Moscow and in the Prime Minister’s Office before pivoting to local government. He was elected in 2018 at age 36 and has pursued a modernization push since, forging partnerships with companies like Nitori and Pixie Dust Technologies and recruiting private-sector talent into town administration.
The town, best known internationally as the home of the Nikka Whisky Yoichi Distillery and Hokkaido’s largest wine-grape growing region, has seen its population decline steadily since peaking around 1960.
Yes, but: The critical question is whether a one-time cash payment amounts to the kind of sustained child welfare spending that the research identifies as actually moving fertility rates.
Akashi didn’t boost its fertility to 1.65 with baby bonuses. It reallocated ongoing budget to reduce the continuous cost and logistical burden of raising children. Nagareyama didn’t hand out checks; it built station childcare infrastructure that solved the daily operational problem of dual-income parenting.
The 1,741-municipality study’s strongest predictor isn’t lump-sum payments but sustained budget allocation to child welfare as a share of total spending. A ¥1 million bonus at birth is roughly equivalent to 8 months of average daycare costs, meaningful but finite. The question for Yoichi is whether the bonus is the headline for a broader reallocation, or the whole policy.
Private-sector comparisons are instructive but limited. SoftBank offers ¥1 million for a third child and ¥5 million from the fifth onward; Daiwa House has paid ¥1 million per birth since 2005 and reports a 1% attrition rate among recipients. But corporate retention dynamics are fundamentally different from a small Hokkaido town competing against Sapporo and Tokyo for young families.
Yoichi also faces a structural headwind: Hokkaido and Tohoku show the lowest desired birth rates in the country, part of a west-high, east-low pattern that correlates with community trust and civic engagement. Remote island communities show elevated fertility desires even controlling for income and services, but remote mountainous areas like much of Hokkaido do not.
The evidence from Akashi, Nagareyama, and Nagoya shows that local governments can meaningfully boost birth rates. But what works is sustained child welfare spending and infrastructure, not one-time payments. Whether Yoichi’s bonus is the start of a deeper fiscal reorientation, or a headline in search of a strategy, will determine whether it joins the success stories or the long list of well-intentioned gestures that didn’t move the needle.