Patrick McKenzie:

The Japanese employment market has a curious feature: there are regions of Japan with extremely high economic productivity (such as Tokyo, Osaka, and Nagoya, but for the purpose of this issue think “Tokyo” and you won’t be wrong) and regions with low economic productivity (substantially everywhere else). This counsels that a young person born and educated in e.g. Gifu move to Tokyo after graduation to earn a living.

Many, many do. While Japan’s overall population is declining, Tokyo’s increases by about 100,000 people per year.


Educating children is incredibly expensive. The regions are quite annoyed that they pay to educate their children but that Tokyo reaps all the benefits. This state of affairs has continued for decades.

But Japan has a policy response for it, and it is sort of beautiful. Called ふるさと納税 (Furusato Nouzei or, roughly, the Hometown Tax System) [ … ]

Via Matt Levine.