Miyazaki’s Right: Local Governments Boost Birthrates by Investing in Families (While Nations Fail)
More Evidence Keeps Confirming a Simple Truth: Places That Prioritize Making Life Better for Families & Babies Create More Families & Babies
Sixteen years ago, Hayao Miyazaki made a quixotic plea even for a visionary animator: "Children are Japan's best investment." At the time, policymakers dismissed his call to prioritize families over bridges and roads as idealistic. But as we revealed in Miyazaki Might Be Right, towns like Nagareyama and Nagi, provinces like South Tyrol, and nations like the Czech Republic have proven him prescient—showing that sustained, family-first policies can reverse declining birth rates.
Research has been popping up since then, spanning 216 European regions, 229 South Korean municipalities, and 77 Thai provinces. It confirms what hinted at local and regional governance, focused on the right things, is a force multiplier for birth rates. A global pattern has emerged from Denmark's austerity-era childcare networks to Thailand's factory-driven baby boost.
Consider:
In Europe, a 1% improvement in local governance correlates with an 8% fertility jump—outpacing the impact of cash transfers.
South Korean counties, with half the GDP of Seoul, boast double the national birth rate through targeted subsidies and trust in local institutions.
Thailand's industrial heartlands defy economic dogma: factories, not GDP growth, drive a 5.56% rise in births when paired with effective services.
This isn't just about policy checklists. It's about how governments govern—whether mayors redirect funds to daycare (Japan's Akashi City), prefectures turn vacant storefronts into nurseries (Hyogo), or provinces coordinate schools, clinics, and transit into a "family infrastructure" (South Tyrol).
Yet, as Nagareyama's mayor warns, even the most innovative local efforts can't reverse the national decline alone; after all, austerity measures are meant to hurt! Economic (especially oil) shocks have a lovely history of cratering birth rates, with national governments often targeting family support first. The evidence of falling rates since the 1970s and 2010s to an inescapable truth: Miyazaki's vision demands bottom-up innovation and top-down transformation. The lesson? Children are infrastructure—more vital than any bridge or road—but nurturing their future requires focusing on every level of government.
European Evidence Base
The relationship between local governance and fertility rates emerges with particular clarity in Europe's regional variations. A comprehensive study by Costanza Giannantoni and Andrés Rodríguez-Pose, examining 216 European regions across 18 countries from 2010 to 2019, found that improving local government quality by just one percent links to an eight percent jump in birth rates. This research used the European Quality of Government Index, which measures citizens' perceptions and experiences with public services, controlling for GDP, population metrics, education levels, and labor market characteristics.
The Italian Paradox: Bolzano's Success
The story of Italy's Alto Adige-Südtirol province in South Tyrol and its capital, Bolzano, reads almost like a fairy tale. While the rest of Italy faces what Pope Francis calls a "demographic winter," with historically low birth rates, Bolzano exists in what demographers have dubbed a "parallel procreation universe." This isn't magic – it results from sustained, thoughtful investment in families.
While the national government offers occasional bonuses for new births (think treating the symptoms), Bolzano has built a more robust family support system. Think of it as a web where each strand reinforces the others:
Childcare costs are slashed through provincial supplements to national funding
Healthcare becomes more accessible through targeted discounts
Energy bills and transportation costs are reduced for families
Empty apartments transform into neighborhood nurseries through innovative certification programs
The results speak volumes. In Campania, another Italian region, only 27.7% of women can find employment. In Bolzano, 73% of women work – while maintaining healthy birth rates. This isn't about choosing between careers and families; it's about making both possible through consistent, reliable support.
Regional Variations Across Europe
The contrast extends beyond Italy. While France's Provence-Alpes-Côte d'Azur region maintains a fertility rate of 2.02 children per woman, and Nord-Pas-de-Calais follows at 2.01, similar coastal areas in Spain struggle with rates half that size. Spain's Principado de Asturias records just 1.01 births per woman, while Canarias follows at 1.03.
The Implementation Factor
The research reveals that these disparities stem from policy differences and implementation quality. When local governments work well, they reduce the chance of having low fertility and low female employment by eleven percent. This finding proves particularly significant given Europe's increasing economic pressures on families.
Nordic regions exemplify successful implementation. Stockholm maintains high female employment at 81.03% and healthy fertility rates through reliable institutions and consistent policy implementation.
Local Innovation and Adaptation
Successful regions show remarkable creativity in adapting to local conditions. Bolzano's "Family+" benefits card, created through a partnership with local retailers, demonstrates how local governments can leverage private-sector relationships to expand support for families. Similarly, the province's "Welcome Baby" backpacks, filled with resources for new parents, show attention to practical needs beyond financial support.
Long-term Investment Principle
As University of Trento demographer Agnese Vitali notes, "Nobody plans to have children on the basis of one-off policies." Regions like Bolzano's success stems from sustained, predictable investment in family support infrastructure. This approach creates an environment where families can confidently plan for the future, knowing that support systems will remain stable and accessible.
To hammer the point home, This isn't just correlation – the researchers controlled for everything from GDP and population patterns to education levels and job markets.
The South Korean Experience: A Case Study in Local Governance and Fertility Policy
South Korea provides perhaps the most striking evidence of how local governance shapes fertility outcomes. While the country maintains the world's lowest national fertility rate at 0.78 (2023), the dramatic variations across its 229 municipalities—from 0.38 in urban Busan's Jung District to 1.87 in rural Yeonggwang County—demonstrate how effective local implementation can more than double birth rates even within the same national policy framework. Like the stark contrasts between Spanish and French coastal regions (e.g., Spain's Asturias at 1.01 vs. France's Provence-Alpes-Côte d'Azur at 2.02), South Korea's regional variations reveal how local governance quality can produce dramatically different outcomes under similar economic conditions.
Evolution of Policy Framework
South Korea's response to declining fertility rates has evolved through distinct phases, beginning with local initiatives and expanding to include comprehensive national strategies. In 2006, the national government established the First Basic Plans for Low Fertility and Aged Society, providing broad policy directives. However, the most innovative and impactful interventions emerged at the local level, beginning in 2001 with the introduction of pro-natalist cash transfer programs.
Implementation of Cash Transfer Programs
These local initiatives, commonly known as "baby bonus" policies, demonstrated remarkable variation in both timing and generosity. By 2012, they became universal across South Korea's districts, with transfer amounts in 2015 ranging from 0 to 5.1 million won. Recent research has revealed that these programs had substantial effects on fertility rates, with estimates indicating that the total fertility rate in 2015 would have been 4.7% lower without these interventions—representing approximately 562,439 fewer children over the life cycle of the 2015 female population.
The 2022 introduction of the national "First Meeting Voucher" (첫만남이용권) program, providing 2 million won (≈$1,650) to all newborns regardless of birth order, represents an attempt to standardize support across regions while allowing localities to maintain their additional programs. This policy aims to reduce population movement driven by differing local support levels while establishing a national baseline for birth support.
Regional Variations and Implementation
The effectiveness of these programs varies significantly across regions, creating distinct patterns between urban, suburban, and rural areas. Urban centers, particularly metropolitan districts, continue to struggle with extremely low fertility rates. In 2022, Busan's Jung District records the nation's lowest rate at 0.38. At the same time, most districts in Seoul, Busan, Daegu, and Incheon show similarly concerning figures. In contrast, rural areas like Yeonggwang County—a nuclear power hub and small yellow croaker fishing region in South Jeolla Province—achieve a remarkable 1.87 fertility rate, alongside other areas such as Yanggu County (bordering the DMZ) in Gangwon (1.52) and Jinan County in North Jeolla (1.56).
Regional Success Stories
Yeonggwang County: Layered Subsidies
Yeonggwang County exemplifies how smaller areas can achieve remarkable results through comprehensive support. As of 2022, the county implemented a multi-layered system:
Marriage incentives: 5 million won ($4,000) to stabilize unions
Baby care packages: Essentials for infants aged 0–3 months
Child-raising subsidies: Up to 7 million won ($5,800) for first children
"First Meeting Vouchers": Additional 2 million won ($1,650) for newborns
This system explains Yeonggwang's fertility rate of 1.87 (2022)—more than double the national average—despite having half the GDP of Seoul.
Yanggu County: Military-Healthcare Model
Yanggu County, one of South Korea's smallest regions (population: 21,000), leverages its DMZ-adjacent military population (80% of residents) and healthcare innovation to achieve a 1.52 fertility rate. Key initiatives include:
A 2.6 billion won ($2.2 million) postpartum care center (opened 2020) offering:
Free 2-week stays for locals (normally 1.8 million won)
24-hour newborn care with a 4:1 baby-to-staff ratio (vs. Seoul’s 10:1)
Traditional wellness programs (e.g., tea ceremonies)
Military-specific incentives: Preferential housing, early leave, and promotion advantages for multi-child families
The center maintains 100% occupancy, with a waiting list of 64 mothers (including non-residents).
Urban Exceptions: Gwacheon and Yangju
Even in high-density areas, some urban districts defy trends. Gwacheon and Yangju (Gyeonggi Province) use corporate partnerships for subsidized housing and flexible work policies to achieve fertility rates above Seoul's average.
Demographic Bonuses
An unexpected outcome of these programs has been their effect on the sex ratio at birth. Cash transfers contributed to normalizing the previously male-skewed ratio, particularly for third children. Without interventions, the sex ratio for third children in 2015 would have been 124.7 boys per 100 girls; instead, it stabilized at 105.3 boys per 100 girls—a significant correction of historical gender imbalances.
Policy Implications
South Korea's experience reinforces that effective local governance can significantly influence fertility outcomes, even within constrained national frameworks. However, it also highlights the limits of local action alone—echoing warnings from Japanese mayors about the need for coordinated national-local approaches. As in Europe and Thailand, the key lies in policy design and rebuilding governance systems capable of sustained, place-specific implementation.
Thailand's Provincial Variations
A recent analysis of Thailand's 77 provinces reveals how local governance shapes demographic outcomes across different regions. The findings demonstrate that provincial administration quality can significantly influence fertility rates, even when controlling for broader economic conditions. These variations provide valuable insights into how local governance can affect demographic patterns.
Industrial Province Success Stories
The provincial data reveals a striking pattern in industrialized areas. Each additional factory per thousand people correlates with a 5.56% increase in birth rates, suggesting that local economic stability through industrial development creates conditions conducive to family formation. This relationship proves particularly strong in provinces that combine industrial growth with effective local services and infrastructure.
The eastern seaboard provinces exemplify this pattern. Areas with higher concentrations of manufacturing facilities show notably higher fertility rates than similarly developed provinces with less industrial activity. Local governments in these regions have successfully implemented support systems for working parents, including workplace childcare facilities and flexible working arrangements. The effectiveness of these initiatives appears directly linked to the quality of local administration and the ability to coordinate with industrial employers.
Urban-Rural Implementation Differences
Higher population density in Thai provinces positively correlates with birth rates, contradicting patterns seen in many other countries. For each increase of one person per square kilometer, birth rates rise by approximately 0.001%. While this effect appears modest, it becomes substantial in heavily populated areas and points to the importance of local service delivery in urban settings.
Urban provinces have developed particularly effective mechanisms for delivering family support services. The research finds that municipalities with integrated service delivery systems – where healthcare, education, and family support services are coordinated through single administrative units – show markedly better outcomes. These provinces demonstrate that density can be advantageous when local governance effectively leverages the proximity of services and facilities.
While facing different challenges, rural provinces have developed their successful approaches. Some have implemented mobile service units to reach dispersed populations, while others have created community-based support networks. The success of these initiatives varies significantly based on local administrative capacity and leadership quality.
Local Service Innovation
Provincial variations in public service implementation reveal significant differences in demographic outcomes. Regions with more effective local governments show stronger results from similar policy initiatives, particularly in healthcare delivery and social services. The research found that provinces with better mental health outcomes consistently show higher fertility rates, highlighting the importance of local healthcare administration.
Some provinces have pioneered innovative service delivery models. Local governments have established one-stop service centers for families, integrating childcare support, healthcare services, and administrative assistance in single locations. Provinces that have successfully implemented these integrated service models show notably higher satisfaction rates among young families and, correspondingly, higher fertility rates.
Provincial Economics
The relationship between local economic conditions and fertility rates reveals important nuances at the provincial level. While national GDP growth shows specific patterns, individual provinces demonstrate that local economic management matters more than absolute wealth levels. Provinces with effective financial management and strategic investment in family support infrastructure often achieve better demographic outcomes than wealthier provinces with less effective governance.
Local financial independence - a measure of a province's ability to generate its revenue - shows varied relationships with fertility rates depending on local governance quality. Provinces that effectively leverage their financial resources to support family-friendly initiatives demonstrate better outcomes, regardless of their absolute level of economic independence.
Several provinces have distinguished themselves through particularly effective policy implementation. These success stories share strong local leadership, effective coordination between administrative departments, and responsive adjustments based on local needs and feedback.
The research identifies several key factors in successful local implementation:
Effective coordination between provincial health services, education departments, and social services emerges as crucial. Provinces that maintain strong inter-department cooperation show better outcomes.
Local governments that successfully adapt national policies to local conditions while maintaining program integrity show better results. Adaptability and consistent implementation quality are key.
Japan's Famous Local Governance
Several cities have established themselves as leaders in family-friendly governance through sustained, comprehensive approaches. Nagareyama's success in reversing population decline stems from early intervention and integrated support systems. The city's mayor has emphasized the importance of creating an environment that addresses why people hesitate to have children.
Under former mayor Fusaho Izumi's leadership from 2011 to 2024, Akashi City demonstrated how strategic resource allocation can transform a city's family support infrastructure. By doubling childcare spending through the reallocation of funds from public works projects, Akashi created what Izumi describes as "an easy place to live." While this approach generated initial controversy, its effectiveness in supporting families has validated the strategy.
Force multipliers (Local Governments) can only do so much!
Local leaders in Japan are increasingly vocal about the limits of municipal innovation without national support. Bringing up again what Nagareyama's mayor explained to Bloomberg, the challenge runs deeper than individual city initiatives: "Unless the national government changes its policy, it will be impossible for local governments to reverse the trend alone. Japan doesn't have a concrete policy; it just responds to what is happening, which is only putting a band-aid on it."
Chiba City's Mayor Kamiya has transformed this frustration into action, presenting a comprehensive reform agenda to Japan's Children and Families Agency. His vision extends beyond simple funding requests, outlining four essential pillars of national-local coordination: a Universal Childcare Access System that guarantees care for every child, stable and predictable financial resources that let cities plan for the long term, solutions to the chronic shortages of childcare workers, and standardized medical expense subsidies that ensure equal support for families across Japan.
Not Just Japan
These findings point to a more nuanced approach than previously considered by policymakers. Strong local governance can help maintain fertility rates even when national resources are constrained, as seen in Denmark and France's benefit reform experiences. But the relationship isn't automatic—it requires careful attention to implementation, local context, and the interaction between different levels of government.
Still, Local Governments are trying new things.
Japan offers the most famous picture of how local governance can drive demographic change, with Nagareyama and Nagi being the most visible. The results are so visible that a small but growing number of municipalities nationwide are implementing innovative family support approaches. The past decade has seen cities and towns taking increasingly proactive measures against dwindling populations, with recent months showing a particular surge in local initiatives.
In 2024, see this small and large growth in local policy innovation.
June 5th - Kōshū, Yamanashi has unveiled plans to extend free childcare to all children aged 0-2 starting this September, aligning with similar policies in neighboring municipalities. The city council is considering a supplementary budget of 26 million yen to fund this initiative. While Japan's national system already provides free childcare for children aged 3-5, Kōshū had previously offered free care only to second and subsequent children from lower-income households in the 0-2 age group.
June 13th - In Okinawa Prefecture, both cities and the prefecture plan to implement free school lunches for middle school students starting in 2025. The Prefecture Governor Tamaki Denny announced a policy to uniformly subsidize half the cost for all 41 municipalities, including those that do not implement full free lunches.
July 19th - Nagano City plans to eliminate out-of-pocket medical expenses for children 18 and under, a significant expansion from its previous policy that capped costs at 500 yen per visit. Earlier this year, the city had already extended medical expense subsidies from middle school students to all children under 18.
July 22nd - Hyogo Prefecture has launched its first "Child-Raising Housing Promotion Zones" in Amagasaki City. These zones encompass areas along the Hanshin Electric Railway line and the neighborhoods surrounding Mukogawa, Tsukaguchi, and Sonoda stations on the Hankyu Railway. This initiative is part of a pilot program aimed at subsidizing families to purchase larger homes, with the ultimate goal of encouraging families with children to settle permanently in the area. As part of this effort, the prefecture and city have partnered to provide financial incentives to eligible households.
Two million yen is awarded to households that purchase newly built detached houses with a total floor area of at least 100 square meters in the designated zones.
For second-hand houses, households will receive a subsidy of 600,000 yen.
Businesses opening "children's homes" (after-school childcare facilities) or cram schools in vacant commercial spaces will receive a maximum subsidy of 5 million yen as part of the development costs.
Implementation Challenges and Solutions
Japanese municipalities have demonstrated remarkable creativity in addressing implementation challenges. When faced with resource constraints, cities like Akashi have found innovative funding solutions through budget reallocation. Others have focused on maximizing existing infrastructure, as seen in Hyogo Prefecture's initiative to repurpose vacant commercial spaces for childcare facilities.
Future Directions and Scalability
The experience of these pioneer cities offers valuable lessons for scaling successful approaches. While local leaders acknowledge that each municipality faces unique challenges, certain core principles emerge from their collective experience. These include the importance of integrated support systems, the need for stable long-term funding mechanisms, and the value of flexible implementation strategies that adapt to local conditions.
However, as Nagareyama's mayor has noted, these local successes, while significant, ultimately require stronger national policy frameworks to achieve their full potential. This growing municipal experience provides crucial insights for developing more effective national-local partnerships in addressing Japan's demographic challenges.
Conclusion
Hayao Miyazaki was right—and the numbers prove it. From Nagareyama's daycare buses to Thailand's factory-driven baby booms, his belief that "children are Japan's best investment" has evolved from an idealistic plea to empirically validated policy. These cases show that governance focused on families isn't just moral—it's effective and remarkably resilient. Even in the face of national headwinds, a few brave local governments keep finding ways to improve family support.
Yet Miyazaki, a lifelong critic of bureaucratic inertia, would scoff at our current half-measures. These policies remain trapped in a world of political short-termism and institutional myopia. Local mayors redirect budgets to nurseries while national leaders cling to outdated priorities. Provinces innovate while parliaments deliberate endlessly.
Governance alone can't compensate for leaders who see children as line items rather than legacies. To reverse the demographic decline, we need more than policy checklists; we need systems that reward long-term thinking and cultures that treat parenting as nation-building. To Miyazaki, we need economies that measure wealth not by GDP but by the number of citizens who can confidently build families, knowing their ordinary dreams of raising children won't require extraordinary sacrifice.
Then again, supporting ordinary families' dreams remains anathema to some national leaders, billionaires, and a billionaire's mother who demands, "You don't have to go to the movies, you don't have to go out to dinner." They want more meat for the machine, preferably without any cost on their end or any lip.