To combat a shrinking population, a small town in northern Japan has decided to give a cash award worth about $9,600 to each female resident who has a third child.

To be eligible, the women must have lived in Yamatsuri town for more than a year, town hall spokesman Eiichi Takanobu said.

Yamatsuri, where the population has fallen from 7,400 a decade ago to 7,000 this year, is not alone among Japanese towns who are losing people.

As the country’s birthrate declines, demographers have predicted Japan’s population will peak at about 127.7 million next year and fall rapidly over the next half-century to about 100 million.

The situation is raising concerns about how future generations will support the growing ranks of elderly and how businesses will survive as the labor pool shrinks.

To encourage families to have more children, the central government has started building more day-care centers and encouraged men to take paternity leave.

It is rare, however, for a town to offer its female residents a large sum for having a baby.

Yamatsuri will hand mothers a lump sum of $4,800 within three months after giving birth to a third baby. The women will then be given $480 each year between the child’s second and 11th birthday, Takanobu said.

Last year, 50 babies were born in Yamatsuri, up from 40 in 2003, Takanobu said.

Japan’s birthrate fell to a record low of 1.29 in 2003 as improved career opportunities give women more options aside from marriage. Many families also put off having children due to the difficulties of finding affordable child care and weak support for working mothers from companies and communities.

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