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Reasons to Expect a Pattern of Diverging Destinies in Japan

Public Policy

Public policies related to families in Japan are generally consistent with those thought to contribute to growing bifurcation in family outcomes. Levels of public support for families are generally low and benefits are typically means-tested. Japan has one of the lowest levels of spending on social policies among wealthy countries. Japan spends less than 2 % of GDP on family benefits, which is well below the OECD average and about half the level of countries with the highest family expenditures (OECD 2015). Welfare benefits (seikatsu hogo) are relatively limited and conditions for qualification are stringent. Despite recent growth in the number of welfare recipients, the number of recipients in households with children has remained stable (Ohtake et al. 2013). This is one reason why, as discussed below, a relatively high proportion of single mothers are in poverty despite working full time and often living with parents. Because many poor families do not qualify for welfare benefits, public income support is limited to a small universal child allowance (kodomo teate) and somewhat larger means-tested childrearing allowance (jido fuyo teate) (about $500 per child) for single parents (Abe and Oishi 2005; Akaishi 2011; Raymo and Zhou 2012). These benefits have become more restrictive in recent years (Abe and Oishi 2005) and Japan’s welfare policy environment can be seen as similar in some ways to that associated with bifurcation in family behavior in the U.S. (McLanahan 2004).

For women with higher levels of education—who have higher earnings capacity themselves and are more likely to be married to higher earning husbands—the opportunity costs of divorce and single motherhood are thus high. Similarly, the opportunity costs of early family formation (which may prevent both investment in her own human capital and the search for spouse with high earnings) may be particularly high for highly educated women given limited support for childrearing and strong tax incentives for married women to limit their own earnings in order to maintain dependent exemption on their husband’s taxes (Akabayashi 2006). Limited support for childrearing includes insufficient access to high-quality, affordable day care (especially in large metropolitan areas), and expectations of long work hours and long commutes (Boling 2007; Yamaguchi 2005). Recognizing that this policy environment may be contributing to Japan’s very low fertility rate, recent policy efforts have sought to improve women’s ability to balance full-time employment and family responsibilities. These efforts include the expansion of parental leave following birth, increase in the level of salary replacement during leave, the option to work shorter hours, and other support for private sector efforts to facilitate work- family balance (Nagase 2014). These policy initiatives should work to limit socioeconomic differences in family behavior by reducing the opportunity costs of early childbearing, divorce, and single parenthood and by facilitating continuous attachment to the labor force across the socioeconomic spectrum. However, existing empirical evidence casts doubt on the effectiveness of these efforts. While it is true that there has been a substantial increase in the proportion of women who take maternity leave, there is little evidence of change in the proportion of women who exit the labor force following childbirth. In other words, more women are taking childcare leave before exiting the labor the force than in the past, but the total proportion leaving has remained stable (Nagase and Moriizumi 2013; National Institute of Population and Social Security Research 2012). Educational differences in post-birth labor force attachment have, to our knowledge, not yet been studied. We provide some of the first evidence on this question in Chap. 4.

 
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