As part of an economic stimulus plan aimed at mitigating the impact of the COVID-19 pandemic, Japan plans to distribute 100,000 yen ($880) in cash, vouchers, or a combination of the two to people aged 18 and under.
The economic stimulus package, estimated to be worth hundreds of billions of dollars, is expected to be finalized by the end of the month.
Around the spring of 2022, households will be entitled to receive 100,000 yen per child, regardless of household income, under the plan.
The government will use its reserves in state coffers to fund the cash payouts, according to the Yomiuri newspaper on Friday, Nov. 5, implying that the plan will not result in a large issuance of government debt.
The administration of new Prime Minister Fumio Kishida is also considering cash payouts to low-income households and temporary workers, according to the paper, adding that details are still being worked out by the ruling party.
“Compared to the previous blanket payout that covered all households, more of the money this time could be funneled into consumer spending because it targets those in need of cash,” said Masato Koike, senior economist at Dai-ichi Life Research Institute.
However, some are skeptical of the handouts’ ability to stimulate the economy. When the government gave the same amount to all residents in Japan in April 2020, most chose to save rather than spend, resulting in little economic stimulus.