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And why wouldn't they? Every modern economic system seems at least partially based on the assumption that population grows or at the very least doesn't decrease.
The main problem with a falling birthrate is not a shrinking population but instead an aging one. No matter the details of the implementation (pensions vs savings) the working support the non-working, retired people. A falling birthrate means the proportion of non-working people increases forever, until it's completely unsustainable.

People always seem to bring up the same interventions to stabilize this, like free childcare and tax incentives. These might be good ideas but they have been tried and haven't made a difference.

Personally I think more radical reforms to modern life will be required, like no one is allowed to work full-time until >40 and mothers of >2 get a special hat that lets them skip lines at theme parks or something.

>no one is allowed to work full-time until >40

Your solution to a collapse in the supply of labor, is to further restrict the supply of labor?

It's mostly a crazy idea to try and shift discussions away from the things that we know won't work.

If we continue to squeeze young people they are going to continue making the same decisions.

You can only eat the seed grain for so long before there's nothing to plant.

Bans are silly. Before, societies didn't have social safety nets. Having kids and families was your safety net. If we have transitioned society to expect the state to provide safety nets through a system of taxes and disbursements, then we also need to account for the externalities of children in that system. That mostly looks like compensating parents and especially women for the societal benefits of having children in a market accounting for externalities.
Other countries have this issue, but they offset it with strong immigration and foreign workers, to include a clear and easy path to citizenship or permanent residence.

The problem with Japan (and a few other countries), is there are extremely high levels of racist and nationalistic ideology (even towards other Asians) over "purity", which aren't often openly discussed for trade and public relations. These kinds of attitudes often devolve into policies that aren't going to help the tax base. It also exacerbates the problem, as more "foreigners" discover they aren't really welcomed nor will be accepted.

So, Japan will remain "pure", as its population steadily and rapidly decreases. It's arguably a Japan problem, if they want to dwindle into irrelevancy (and some are content to do exactly that), while entertaining and indulging in various prejudices and discrimination.

All the socioeconomic reasons to have children are virtually gone in the first world, leaving only your personal feelings about having children

So it’s your personal feelings about maybe wanting to raise a tiny version of yourself, against all the new social and economic reasons to not have children, of which there are are many.

It’s great that Japan is mitigating some of the economic costs to those who want to have children but I doubt it moves the needle.

> All the socioeconomic reasons to have children are virtually gone in the first worl

Personal socioeconomic reasons are gone, but not societal socioeconomic reasons. We all need children because otherwise there will be no working adults to support entitlement benefits like social security pensions, or socialized healthcare like medicare

If it actually became a societal priority I’m sure a solution could be found. For example, a sufficiently large lifelong stipend per child for qualifying mothers could be compelling, although politically impossible. Basically paying people to be career parents - meaning, a stipend large enough that it’s not just a backup plan for people who flunked school, but a way to maintain your standard of living and also be a parent.

Otherwise just import a ton of people from poor countries to maintain population dynamics. This will work for atleast a few more generations it seems.

> If it actually became a societal priority I’m sure a solution could be found.

The only known way to mitigate it is through immigration. Canada is the poster child for this strategy since they haven’t been able to naturally replenish their population since the 1970s. The issue is that you’d have to count on other countries not having this problem, and you need a local populace that is educated enough to realize the ongoing need for immigration. (I am not aware of any country with a large portion of citizens who are aware why immigration is needed.)

Japan, South Korea, and Italy have been dealing with this problem for over a decade now, and they still have no solution. They have tried all sorts of socioeconomic incentives which haven’t worked because the root of the problem isn’t socioeconomic.

The real problem is that as a country industrializes, the less fertile their males become over time. We don’t know the exact cause, but it is affecting our biology when we account for socioeconomic changes like the sexual revolution. This is for all countries now with the exception for Central Africa, so immigration as a tool will no longer be able to fully stop gap the problem like it did in the 20th century.