Japan’s long-running demographic slump has a surprising new wrinkle: births in the Tokyo metropolis rose in January–November 2025, up 0.97% year-on-year, and the year may end in positive territory. That small uptick looks unremarkable against national headlines about a shrinking population, but Tokyo’s trend is the clearest signal yet that aggressive local welfare can change family decisions.
When analysts speak of Tokyo they often mean the 23 central wards; the policy story, however, belongs to the Tokyo Metropolis (東京都), a prefectural-level unit with powers to deploy large-scale subsidies. The metropolis has used that authority to roll out a sweeping package of child-related benefits, reshaping the economics of having children inside its borders.
Tokyo has committed roughly ¥2 trillion a year to pro-natalist measures — a sum equal to tens of billions of dollars or roughly ¥88 billion in renminbi terms — and has expanded a web of cash payments, fee waivers and in-kind support. Key measures include a “baby-priority” support package worth up to ¥270,000 redeemable as goods and services through a special portal, up to ¥100,000 for painless childbirth, a ¥500,000 national birth grant, monthly child allowances (¥15,000 for under‑3s, ¥10,000 thereafter until 18), free medical care for 0–18 years and broad waivers of daycare and school fees, including public high schools and tuition at Tokyo Metropolitan University.
The policy mix is explicit and comprehensive: money to ease upfront costs, free or subsidised services to lower ongoing expenses, and guarantees that the state will pick up routine fees that elsewhere often deter births. Tokyo even offers generous study‑abroad fellowships and short‑term travel grants that would look extravagant in many countries, signalling a broader strategy to remove economic reasons to delay or forgo parenthood.
That spending appears to be changing behaviour. Tokyo’s total fertility rate fell to 0.99 in 2023 — the “0.99 shock” that branded the metropolis a demographic black hole — but the newfound rise in births shows how quickly incentives can alter choices when the calculus of childbearing shifts. Officials are layering further measures for 2026, including an additional ¥11,000 per child aged 0–14, and anecdotal evidence suggests higher‑income households in particular are deciding to have more children given the improved economics.
The metropolis’s experiment sits against a favourable labour‑market backdrop that reduces opportunity costs of childbearing. Japan’s spring 2024 cohort of university graduates saw an employment rate of 98.1%, and sectors outside the civil service are offering faster pay growth and earlier promotion than local government jobs. Lower competition for public-sector posts, weakening appeal of the “iron rice bowl” and robust recruiting of high school graduates into the workforce have altered young adults’ income prospects and career timing — a combination that complements Tokyo’s family support.
The policy takeaway is simple but consequential: cash plus free services, in an economy with jobs, can nudge fertility upward. The Tokyo case also raises hard questions. Can such lavish, geographically concentrated subsidies be sustained without straining public finances? Will they pull population and spending into the capital, exacerbating regional divergence? And might improved incentives primarily change timing of births rather than total lifetime fertility? Answers will shape whether Tokyo’s program becomes a national or emulated model across other prefectures and countries.
For policymakers elsewhere, Tokyo offers a clear demonstration that fiscal muscle and administrative willingness to make parenting cheap can produce measurable demographic effects. Whether the gains persist and at what fiscal and social cost will determine if “have a child in Tokyo” becomes not just a social slogan but a durable demographic shift.