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Japan Offers Financial Incentives to Increase Birthrate, But Family-Friendly Workplace Policies Also May Be Necessary

The Wall Street Journal reports that the Japanese government is proposing greater financial incentives to increase the country's birthrate.  The proposal comes as Japan experiences, simultaneously, a declining birth rate and a rising aging population. However, given that Japan's low birthrate is largely attributable to the difficulties facing women who wish to work while their children are young, the effectiveness of increased financial incentives is unclear.

Japanese women--traditionally expected to manage household affairs, especially child-rearing--would prefer shared domestic responsibilities and the ability, like men, to work while raising a child. Currently, however, Japan's tax system favors single-income families, which has slowed the development of family-friendly corporate policies and social acceptance of working mothers. Japan has the lowest percentage of working mothers with children under the age of two out of any Group of 10 nation (Belgium, Canada, France, Italy, Japan, the Netherlands, the United Kingdom, the United States, Germany and Sweden). At around 30%, Japan's percentage is considerably less than that of the United States at 54% and the Netherlands at 73%.

Daycare availability is another concern. Spots at government-sponsored facilities have been difficult to secure. Japan's health ministry estimates 25,000 parents are on daycare wait lists. Private facilities, which can cost twice as much as government-sponsored centers, also have long waiting lists.

The estimated cost for the increased incentives is $71 billion per year. Potential benefits could include:

  • A lump sum payment of $6,000 per birth (a 31% increase from current levels);
  • $3,300 a year to parents for every child (until the child reaches the age of 15);
  • free tuition for high school; and
  • more state-supported day care.
Tags: Japan
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