Japanese families reportedly set to receive 1 million yen per child for moving out of Tokyo

The Japanese government will give families up to 1 million yen ($7,670) per child if they opt to move out of Tokyo, according to multiple media reports.

The government was already offering 300,000 yen per child for families relocating to other parts of the country.

The move comes as authorities attempt to disperse the dense populations in Japan’s metropolitan areas, improve declining birth rates and diversify aging populations in more rural areas.

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.

Japan’s Cabinet Office did not immediately respond to a request for comment on the reported measure when contacted by CNBC.

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.