Why Don’t Japanese People Have More Babies? It’s Cheaper

My wife just gave birth.

No, it wasn’t Scandinavian level free and perfect (a biased half Swede here). Yes, Tokyo hospitals love clipboards and rules, and public hospitals do look like they’ll fall apart at any moment.

But on cost, it was fine. Shockingly fine, especially compared to our favorite country to roast, the United States. And yet the US still has a way higher birth rate than Japan. If having a kid here is cheaper, why aren’t more Japanese couples doing it?

I just released a video on this topic, my first sponsored piece. I am proud of how it turned out and would love your feedback:

Let’s start where the American horror stories usually begin: The delivery bill. In the US, “average” out of pocket is around $3,000, and plenty of completely normal births blow past $10,000. Having a bill as high as >$40,000 is not rare.

In Japan the plumbing is different. Every resident is insured. Prenatal checkups are largely covered by municipal vouchers. Then the government fires a ¥500,000 grant straight at the hospital. A typical birth nationwide runs about ¥480,000, so many families actually come out a bit ahead after the grant. Even in central Tokyo, it is around ¥600,000, but that usually includes a five nights postpartum stay with food, even for normal births, you are usually paying the difference of about ¥100,000, roughly $650. Go plush at a private clinic with an epidural and extras and you might land near ¥900,000 total. After the grant your bill is about ¥400,000, roughly $2,700, which is under the U.S. average.

Child care tells the same story. US averages hover around $10,000 to $15,000 a year for one kid, and big coastal cities can double that. Here, public hoikuen fees are income based. In Setagaya, many middle income households pay roughly ¥20,000 to ¥50,000 a month, about $130 to $320. From age three, tuition for public preschool and day care is effectively free nationwide. You still pay for meals and extras. Even if you swing private, a solid Tokyo center is often about ¥80,000 a month, roughly $500, which is about half the US average.

“What about the waitlists?” Fair question.

In dense wards it is a point system, and dual income families score better. The part most people miss is that capacity has been expanding for years and the waitlist problem has fallen by roughly 90 percent since 2019. It is not utopia, you still need to apply strategically, but it is no longer the Hunger Games. Even if you end up private for a year, you are still typically way below the US average, and from age three tuition falls to zero.

Now zoom out to what actually crushes families: Housing plus child care.

A US study pegs the average mortgage plus child care at about 66% of household income. In places like Los Angeles and San Diego, the math can exceed 100%. In Japan, the picture is calmer. A typical working household brings in about ¥520,000 a month. An ordinary mortgage outside the priciest core plus public hoikuen (nursery) for a toddler is roughly ¥160,000 to ¥210,000, or about 35-40% of income. Once your child turns three, tuition falls to zero and the ratio slides closer to 30%.

So if the bills here are lower, why is Japan’s fertility still stuck around 1.2 while America sits near 1.6?

Because costs are not the whole game. Flexibility is.

Japan delivers affordability and predictability. The US delivers optionality.

In America, the system is expensive but flexible. You can move states, switch jobs, or have one parent step out and reenter the workforce without being branded a career heretic. In Japan, the cash outlay is manageable, but the time tax is brutal. Long hours. Presenteeism. Commutes that eat your evenings. Hoikuen pickup times that clash with end of day meetings. A reentry ladder that is too short for highly skilled mothers who pause for a year or two. Generous paternity leave on paper that too many men still feel they cannot take in practice. Add a tax system and corporate norms that still quietly favor the one breadwinner model, and you get a society where starting a family feels like stepping off a moving train.

Layer in demographics and institutions. The US birth rate is propped up by immigration and a culture where “big family” still has narrative weight. Japan has little immigration, later marriage, and a lot of risk aversion after three lost decades of wage stagnation.

Put simply, Japan have made having a child affordable, but not at all easy.

If you are a policymaker, the lesson is not “mail bigger checks.” The delivery grant is already generous. Day care is already subsidized and increasingly accessible. The binding constraint is time sovereignty: Shorter and saner hours, predictable scheduling, real reentry tracks for parents, and zero stigma for dads who take leave. Fix those and the existing financial architecture will finally do what it is designed to do.

If you are a family deciding now, here is the on the ground truth from our experience. The hospital bill will not break you. Nursery is navigable if you plan. The monthly cash flow decrease is far less scary than the internet suggests.

The harder part is negotiating time with your employer and with each other. Solve that, and the “Japan is too expensive for kids” falls apart fast.

The Japanese government does not need to go even more bankrupt to raise the birthrate. It needs to give families back their hours. The money, for once, is the easy part.