Cities battling population decline may have found a powerful remedy – investing in children. New research reveals that small and medium-sized cities allocating more funding toward child welfare successfully mitigate or even reverse population loss, while those increasing spending on elderly care continue to shrink.
A comprehensive study of 1,560 Japanese municipalities conducted by Dr. Haruka Kato of Osaka Metropolitan University found that over 82% of small and medium-sized cities in Japan experienced population decline between 2007 and 2022. However, cities that strategically redirected municipal budgets saw remarkably different outcomes.
“Our research clearly suggests prioritizing child welfare expenditures as a key strategy to sustain populations in small and medium-sized cities,” said Dr. Kato, who published the findings in the Journal of Urban Management.
The study identified a specific threshold – cities that increased per capita child welfare spending by more than ¥50,000 (approximately $330) saw positive population growth. Conversely, cities that increased spending on elderly welfare and public assistance programs experienced continued population decline.
This counterintuitive finding challenges conventional wisdom about supporting aging populations. While Japan faces one of the world’s most severe demographic crises with nearly 30% of its population over 65, the research suggests that municipalities focusing resources on young families create more sustainable communities in the long term.
The study’s methodology provided unusual clarity by examining 15 years of data (2007-2022) during Japan’s period of minimal inflation, enabling researchers to make direct spending comparisons without adjusting for currency fluctuations. Advanced statistical techniques revealed non-linear relationships between specific expenditures and population outcomes.
Beyond child welfare, other municipal spending factors correlated with population stability included street maintenance, administrative improvements, and more efficient allocation of assembly resources. Notably, increased spending on commerce and industry showed no positive correlation with population growth in small and medium-sized cities.
These findings offer a potential roadmap for the many shrinking municipalities throughout developed countries. Research shows approximately 20% of European cities and 23% of Chinese cities are experiencing population decline, though Japan’s situation remains the most severe.
Dr. Kato’s research raises important ethical questions about resource allocation. While redirecting spending toward children appears effective for stabilizing populations, it potentially risks inadequate support for elderly residents and welfare recipients. The study suggests national governments might need to assume greater responsibility for these vulnerable populations while empowering municipalities to focus on family-friendly investments.
For city planners and policymakers worldwide facing demographic challenges, the message appears clear: investing in the youngest citizens may be the most effective strategy for ensuring a city’s future.
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