The Family and the Declining Birthrate, Pension Rights, and Child-Care Insurance in Japan

IIPS

Institute forInternational Policy Studies•

IIPS Policy Paper 297E
November 2003

The Family and the Declining Birthrate,Pension Rights, and Child-Care
Insurance in Japan-- An Economic Perspective on Women's Work -YOKO NAKAGAKIIIPS 2003 ◆ 1

Yoko Nakagaki

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PRINTED IN JAPAN2 ◆ IIPS 2003

The Family and the Declining Birthrate, Pension Rights, and Child-Care Insurance in JapanIIPS Policy Paper 297E
November 2003

The Family and the Declining Birthrate,Pension Rights, and Child-Care
Insurance in Japan--An Economic Perspective on Women's Work-YOKO NAKAGAKI

Contents
The Increasing Number of Small Households and Instability in the Family
Instability in the Family and the Declining Birthrate
Economic Evaluation of Women in the Workforce
Solutions for the Future
Economic Assessment of Work Done in the Home and the Taxand Social Welfare Systems
Social Support for Child-Care / Introduction of Child-Care Insurance
Conclusion
Notes

Page 1Page 6
Page 13
Page 17
Page 18
Page 27
Page 31
Page 32

IIPS 2003 ◆ 3

Yoko Nakagaki

The Family and the Declining Birthrate,Pension Rights, and Child-Care Insurancein Japan—An Economic Perspective on Women’s Work—YOKO NAKAGAKIThe nature of the family is undergoing dramatic change in Japan. Whereas getting married
and having a family was expected behavior for the vast majority of young people in thepast, contemporary Japanese are deferring until later, or even renouncing altogether, theinstitution of marriage. Further, expectations about marriage and family have also evolved.
It has been found that women's changing consciousness toward marrige contrasts with thetraditional concept held by men in Japan. Increased work opportunities for women, therising cost of raising children and the economic gap between working and non-working
women are factors affecting the birthrate. As leaving the workforce significantly impacts
not only the current, but also the future, economic status of women, reconsideration of
the system of pension rights is required if a higher birthrate is to be promoted. This paper
calls for development of a system favorable to families and for introduction of a child-careinsurance system that will be applicable to the increasing diversity in family structuresin Japan.

The Increasing Number of Small Households
and Instability in the Family
The family unit is becoming destabilized. Although people have high expectations of family
ties, the fulfillment of these expectations is becoming more difficult.

The trend towards smaller households
Against a backdrop of a declining birthrate and an aging society, the numbers of single-person,
single-parent, and childless households are all growing.
As a result, 35 of the 47 prefectures are expected to have a predominance of single-personhouseholds by 2020.1 If “family” is defined narrowly as a group of two or more family members
living together, in the near future-by choice or by fate—Japan will have a predominance ofindividuals who are without families.
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The Family and the Declining Birthrate, Pension Rights, and Child-Care Insurance in Japan

Reducing the family unit to an unstable psychological function
Reducing the family to family ties
Meanwhile, the family unit is being reduced to a role as provider of a psychological connection
through family ties (see Figure 1).
During the high economic growth period, men took salaried positions at companies, and thefamily unit ceased to be the center of income-producing activity. Then, as the nuclear family
became prevalent, care for the elderly and support for dependents declined. There was a period
before the mid-1980s when two children per couple was the norm; however, that figure has
been dropping steadily ever since. As a result, child-rearing as a family function is receiving
less emphasis.

Total fertility rate
Legitimate fertility rate

Figure 1

Total fertility rate and legitimate fertility rate

Sources:
Legitimate fertility rate: National Institute of Population and Social Security Research,
11th Japanese National Fertility Survey
Total fertility rate:

Ministry of Health, Labor and Welfare, Vital Statistics of JapanThe result is that people are now looking for “stronger family ties” in the family unit asrepresented by “happiness” and “rest and relaxation.”2 In a separate survey, about 50%
responded “Definitely Yes” to the question “Do you think it is good to put family first above
all other considerations?” If those who answered “More or less, yes” are included, nearly 90%
are included in the “family-first” group.3 This survey also shows that almost 60% of those in
the family-first group are generally satisfied with their lives, compared to less than 30% for
those who are not in the family-first group.

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Yoko Nakagaki

Growing barriers to marriage and household formation
However, it is difficult to see these psychological family ties as more than a relationship prefacedon economic dependence.
During the bubble economy, for example, women were looking for men with the “bigthree”: height, education, and income. Height aside, men knew what they had to do to meet
expectations. In contrast, it is extremely difficult to define the human qualities required to create
psychological ties.
Recently more and more people are marrying late or not at all, and as of 1997, 90% of
unmarried people were saying that they “plan to marry at some point.” However, half of thesepeople said “I do not mind staying single until I find the ideal mate.”4
Moreover, family formation requires sufficient earning power to run an independent household,yet among young people the unemployment rate is extremely high. This is partly attributable
to the protracted economic slump and partly attributable to the commitment of businesses toprotect the jobs of older workers. For example, while the overall unemployment rate in 2002
was 5.4%, for those aged 20 to 24 the rate stood at 9.3%, and for those ages 25 to 29 it was
7.1%. Although they are better off than the unemployed, temporary workers are paid less andare not able to acquire the job skills that they would if in permanent employment; hence theirprospects for establishing a household are slim.
The differing values held by men and women are also an issue. There is a group of men in theirlate twenties and early thirties whose values may be characterized by the following statements:“the oldest son has special duties different from those of the other children,” “if there are no
male children, it is better to adopt a son so as to preserve the family name,” “premarital sex iswrong,” “divorce should be avoided at all costs,” “a womanʼs happiness lies in marriage; sheshould not devote her life to working.”5 Within this group the percentage of men who are single
is extremely high in comparison to the male population in general (see Figure 2).
This represents yet another barrier to the establishment of families. If men are chained to
antiquated concepts of family while the attitudes of women are changing, forming families
through marriage may be even more difficult as a consequence.
This factor is expected to be push the lifelong celibacy rate up from 4.9% among those bornin 1950 to 16.8% for those born in 1985.6

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The Family and Declining Birthrate, Pension Rights, and Child-Care Insurance in Japan ʼ

1.

Graph based on Cabinet Office, Government of Japan, Survey on National Lifestyles (2001)

2.

Percentage of single people by age bracket

3.

Traditionalists 378 men (aged 20~49), 297 women. Liberals 505 men (aged 20~49), 694 women.

4.

Group 1 = Traditionalists; Group 2 = Liberals

Figure 2

Traditional men and celibacy

Source:Cabinet Office, Government of Japan. White Paper on the National Lifestyle (2002)
More conservative family values than Europe and the US
Japanese family values are conservative compared with Europe and the US. In Japan, only
26.5% of people approve of same-sex relations, compared with almost 80% in France andGermany, and while approval of extra-marital sex is 31.7% in Germany and 24.8% in France,
the figure is a mere 7.6% in Japan.7 The approval rate for divorce is 46.1% in Japan, comparedto 69.8% in France.
However, these trends are changing and divorce is on the rise. People who agree with thestatement “people who are not satisfied with their partner should get divorced,” are now in the
majority (24% “agreed”, 30.2% “more or less agreed” in 1997).8
One survey asked married people if they had ever considered divorce. The proportion ofpeople who answered “I have never considered getting divorced” was extremely high among
those that “married to live with the person I love,” while the proportion was low among
those who considered marriage “something everyone does” and among those who married“to create a family.” These results could be taken as evidence that marriages are more stable
when motivated by a desire to preserve bonds, and that the family itself is being reduced to
psychological bonds.
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Yoko Nakagaki

Differing levels of spousal satisfaction between men and women
It should be noted that in Figure 3 many more men than women have “never considered getting
divorced.” In another OMMG survey, more men also agreed with the statements “I am satisfied
with my partner,” “once married you should stick with it,” and “if they do not live together, a
man and woman cannot be considered husband and wife.”
The difference of opinion between men and women appears to be just as great with marriedpeople as with unmarried people.
Main reason for getting married
To live with the person I love
Everyone gets marriedTo create a family
Figure 3

Ratio of people who have never considered getting divorced
Men
Women
70.0
43.3
55.8
26.3
54.1
22.7

Reasons for marriage and consideration of divorce

Notes:
1.

OMMG Survey

2.

Survey conducted in 1999 on married men and women between the ages of 20 and 59

Instability of the family unit and a search for new bonds
Now, as ever, people look to the family for psychological stability. Yet, as that stability becomes
more difficult to come by, the smaller household, the “household of one,” is becoming moreprevalent, and the family is becoming more unstable.
At the same time, people are finding other means of creating such bonds, for example throughrelationships with pets. According to the 2000 Survey on Animal Protection conducted by the
Cabinet Office, Government of Japan, a full 40% of those surveyed felt that as the birthrate
declines and households become smaller, “the number of households in which the pet isconsidered a family member is growing,” and that “the importance of pets as companions forthe elderly is growing.” This could be seen as an emerging trend towards the creation of newconnections in lieu of the traditional family.

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The Family and the Declining Birthrate, Pension Rights, and Child-Care Insurance in Japan

Instability in the Family and the Declining Birthrate
Staying single, marrying late, or having fewer children
The shift to the nuclear family during the high-growth period included the specialization of therole of wife as homemaker and child-raiser.
As the industrial structure shifted from agriculture, forestry, and fisheries to manufacturing
and service industries, people flooded into the cities seeking work, forming new households,
and raising children. Before the first oil shock, the average number of children per women (thetotal fertility rate) was stable at two (see Figure 1). At the same time, more married women
devoted themselves exclusively to the role of homemaker (see Figure 4), and a pattern wasestablished whereby husbands took salaried positions in companies and wives supported themin the home. Incidentally, the concept of the average household as “husband and wife with twochildren and only the head of the household working” was established at this time. The highgrowth period was also the era in which the role of the husband as worker and the role of thewife as homemaker and child-raiser were defined.

Figure 4

Households with salaried husbands and full-time housewives

IIPS 2003 ◆ 6

Yoko Nakagaki

Notes:
1.

Based on Ministry of Public Management, Home Affairs, Posts andTelecommunications, National Census, and Special Work Force Survey

2.

The numbers for full-time housewives with salaried husbands, and full-timehousewives come from the National Census for the years 1955 to 1970, and from theSpecial Work Force Survey for the years 1980 to 2000.

3.

The number of full-time housewives with salaried husbands is the number of
employed husbands (not employed in agriculture or forestry) with unemployed wives.
The number of full-time housewives represents the number of unemployed wives
among all wives.

Source:Graph taken from Cabinet Office, Government of Japan: White Paper on the
National Lifestyle (2002)
This arrangement was advantageous to companies as well. With wives responsible for the home,companies were able to compel male workers to accept working conditions that included working
long hours or being transferred to different locations. During this era of mass production, theresulting structural efficiency inherent in this arrangement enabled Japan to quickly become
one of the top economies internationally, and the fruits of that economic growth were returned
to employees in the form of wage structures that supported families, and stable, long-term
employment.
Since then, the birthrate has fallen, from a shocking 1.57 in 1989 to 1.33 in 2001 (see Figure1). Initially, the falling birthrate was explained as a result of the increase in the number ofpeople staying single or marrying late. In other words, married women were still having thestandard two children, but the marriage rate was dropping. Since the number of children bornout of wedlock in Japan is small, more people staying single or marrying late would translate
directly into a lowered birthrate.9
Since 1990, the number of children per married woman has also dropped below two.
However, as late as1997 couples still considered the ideal number of children to be 2.53
(although this figure too was dropping). This information clearly shows that the declining
birthrate in recent years is attributable not only to changing priorities but also to factors thatmake it difficult to raise a family.

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The Family and the Declining Birthrate, Pension Rights, and Child-Care Insurance in Japan

Reduced lifetime income for wives and the declining birthrate
While the increase in work opportunities for women has contributed to the declining birthrate,
the increasing cost of raising children and the increasing economic gap between women
who continue working and those who get married and become full-time housewives are also
factors.
According to one hypothesis, woman who work throughout marriage, child-bearing, andchild-rearing will have a lifetime disposable income of ¥469 million, whereas this figure drops
to ¥310 million for woman who leave the workforce and remain unemployed. The decision tocontinue working or not can cost ¥160 million in lifetime disposable income. (see Figure 5.)
The cost of sending a child to a private college is estimated at ¥2.4 million.10
Units: ¥100 million
Lifelong
disposable
income perhousehold

Lifelong disposable Annual Income
income of women
Husband Alive

HusbandDeceased

Continues working

4.69

2.11

0.38

0.19

Retires then returns

4.40

1.82

0.35

0.19

PT after retired

3.41

0.82

0.28

0.18

Fully retired

3.10

0.47

0.27

0.18

Figure 5

Women’s employment patterns and lifetime disposable income

Notes:
1.

Based on the Gender Equality Bureau, Influence Research Committee, Report on
Lifestyle Choices and the Tax, Social Welfare, and Employment Systems (2002)

2.

Assumes that women graduate from a junior college, go to work at age 20, and havetheir first child after marrying a 30-year-old university graduate at age 28. They havetheir second child at age 30. They are widowed at age 75, and die at age 84.

Thus overall a womanʼs decision to continue working has a huge impact on household finances,
particularly given the costs of child-rearing. Furthermore, more women marry in geographicalareas where their opportunities for full-time work are not reduced by marriage (Figure 6), andthis indicates that the barriers to earning income thrown up by marriage, childbirth, and childrearing are prime factors in the declining birthrate.

IIPS 2003 ◆ 8

Yoko Nakagaki

Figure 6

Marriage rates and barriers to full-time work

Notes:
1)

Based on Ministry of Public Management, Home Affairs, Posts andTelecommunications, Workforce Demographics Survey (1997) and National Census(2000)

2)

Difference in rates of full-time employment = percentage of single women working
full-time – percentage of married women working full-time3)

Data for Tokyo is not shown in the figure, since Tokyo constitutes a special case.
(In Tokyo: percentage of unmarried women = 52.1%, difference in rates of full-time
employment = 16.1%)

Source:Graph taken from Cabinet Office, Government of Japan: White Paper on the
National Lifestyle (2002).
As Figure 6 clearly shows, in cities marriage tends to restricts opportunities for full-time work,with the result that small households are prevalent.
At this point it is useful to look at the connection between the formation of families andworking wives. In nuclear family households, where grandparents cannot be relied on for help
with child-rearing, the wife cannot easily continue working in the early stages of child-rearing.
In many cases the wife goes back to work only when the children have grown older. According
to a survey on employment trends, around 70% of women in the workforce aged between 30
and 44 worked part-time in 2000. Part-time employment is a practical choice for women whosechildren are older and who want both to work and be a homemaker. However, compared tofull-time employment, there is still a difference of more than ¥100 million in lifetime income.
This difference is contributing to the declining birthrate.
Wives in extended-family households can get extra help in caring for children while working,and the percentage of these women that continue working between childbirths is high. Yet, thistype of household is gradually disappearing.
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The Family and the Declining Birthrate, Pension Rights, and Child-Care Insurance in Japan

Within this trend towards small households, there will be fewer nuclear family households
and more single-parent households. Presently, single mothers are having difficulty balancing
work and child-rearing and earning enough to raise children because women can often only findpart-time work and can earn no more than ¥1 million per year. Approximately 80% of single
mothers do not receive child-support.
The amount of lost income discourages women from having children, and the difficulty women
have in raising children alone and finding work that pays adequately shows the limitations of
the family in bearing the full weight of responsibility for child-rearing.

Fuller lifestyles, reduced resources, and the declining birthrate
In nuclear family households in particular, many women stop working to raise children, andthe amount of the husbandʼs time spent at work each day is extremely high, even by international
standards (see Figure 7).

Husband

Wife

HollandDenmark
SwedenUSA
Finland
CanadaGermanyJapan
UK
Austria
Australia
Italy

Wife
does paid work

Figure 7

Wife
does housework

Wiferaises children

Husbandraises children

Husbanddoes housework

Husbanddoes paid work

Japanese husbands and child-rearing

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Yoko Nakagaki

Notes:
1.

Based on OECD “”Employment Outlook 2001” (for all countries other than Japan)
Figures for Japan: Ministry of Public Management, Home Affairs, Posts andTelecommunications “Basic Lifestyle Survey Report” (1996)

2.

In the “Basic Lifestyle Survey Report,” the term “income-producing labor” refers
to a job, while the term “work in the home” includes housework, nursing care, andshopping.

3.

Proportions of income-producing labor and work in the home by husband and wife (inone week)

4.

Except for Japan, work for wives refers to full-time work. For Japan, it includes all
work arrangements. For husbands, it is the average for all work.

5.

For countries other than Japan, the survey included parents with children under five. In
Japan, it included parents with children under six.

Source:Cabinet Office, Government of Japan: White Paper on National Lifestyle (2002)

Ultimately, if no-one is working full time, as per the male work model, the family will not beprovided for. On the other hand, a person who does work full-time will not be able to participate
adequately in child-rearing or other home activities. This is why women must make a choice
between home and work.
However, if Figure 7 is recast using actual hours worked, a different picture emerges. The
total number of hours of housework and paid work per household is not that high (see Figure8). The number of paid work hours for husbands is high, but the number of hours worked in
the home is not high in comparison with the hours worked in the home by husbands in othercountries.
Time

Housework + child-rearing + paid work

Paid work

CoupleHusband

Wife

Husband

Canada

21.2

10.2

<

11.0

6.3

UK

20.4

9.5

<

10.9

6.3

Sweden

20.0

10.1

>

10.0

6.4

Germany

20.0

9.6

<

10.4

6.1

Austria

19.6

9.1

<

10.5

6.9

Australia

19.6

9.0

<

10.6

6.1

Denmark

19.0

9.6

>

9.4

7.2

Italy

19.0

8.4

<

10.6

6.6

Finland

18.5

9.0

<

9.6

6.1

USA

18.0

8.8

<

9.2

6.2

Japan

17.6

8.2

<

9.4

7.6

Holland

16.0

8.1

>

7.9

5.2

Figure 8

Source:14 ◆ IIPS 2003
11

Housework hours and paid work hours per couple

Data used in Figure 7.

The Family and the Declining Birthrate, Pension Rights, and Child-Care Insurance in Japan

It is useful to compare lifestyle choices around the world. The percentages of Japanese whosefavorite activities are “playing sports,” “shopping,” “watching sporting events,” and “watching
television” are high; however, a remarkable number of people chose “sleeping” instead. It issafe to infer from these statistics that the hectic pace of life is the result of a crowded lifestyle,and that this hectic pace may play a large role in the declining birthrate.
UK

FranceGermany

Italy

Japan

US

Drinking
champagne

6

8

5

3

1

6

Eatingchocolate

9

12

5

8

2

7

Going out
with friends

22

26

25

20

21

16

Playing
sports

7

6

8

9

15

6

Sex

31

30

33

38

7

33

Shopping

8

5

5

10

13

14

Sleeping

4

4

8

4

20

5

Watching
sporting
events

3

2

3

2

8

3

Watching
TV

5

4

3

2

7

4

Working

3

2

3

3

4

4

Surfing theInternet

2

1

2

1

2

2

Total

100

100

100

100

100

100

Figure 9

Lifestyle choices around the world

Source: Durex World Survey (2001)

Differences in parental economic status and the next generation
As described earlier, the income of single mothers is low. As the family unit becomesdestabilized, single-mother households are expected to become more common. Meanwhile,the seniority pay-scale system is falling out of favor, and a clear trend towards merit-based payscales is emerging. Young people, too, are increasingly opting for a series of non-permanent
positions in lieu of a career path that involves permanent employment at one company. The
gap in personal skills development will grow, which suggests that the difference in income
levels will probably increase as well.
Meanwhile the influence of the parentsʼ economic status on their childrenʼs education
continues to grow. A childʼs level of academic ability will depend on whether or not the parents
can afford tutoring at a cram school. The same differences in economic status responsible carryover into the next generation.
Thus the next generation will be affected by the destabilization of the family unit—both interms of the declining birthrate and of the magnification of differences in the relative abilitiesof the next generation.
IIPS 2003 ◆ 12

Yoko Nakagaki

Economic Evaluation of Women in the Workforce
Women's level of satisfaction with married life is generally low. One reason for this may be thatthe full-time employment of men enables them to provide for the household, but does not allow
for an equable division of responsibility within the home (see Figure 7). Hence, it is difficult
to evaluate fairly the impact on society of the work carried out by women.
Two observations are made in this section. First, the difference in wage levels between men
and women who choose to work full-time is shrinking (see Figure 1); however, it is difficult
to assess the value of the work done in the home, as child-rearing and homemaking do not
generate money directly. Secondly, most women returning to work after having children work
part-time, and the situation for part-time workers is markedly less favorable than for the labor
force in general.

The difficulty of evaluating work within the home
What are the implications of housework for full-time housewives whose husbands work for asalary?
The work of the housewife can be divided into two components: support for the efforts ofthe externally employed husband, the so-called “supportive wife” component, and work doneto raise the quality of home life, namely the housework component (see Figure 10).

Leisure (all time other than working time)

Nursing(=> Public insurance)
Child-rearing

Work to improve thequality of home life=>results in imputed income
Total time

Other
(good meals etc.)

Home(wife)Work

Internal help that supports
the breadwinner
Reflected inhusband’s pay
Paid work (husband)

Figure 10

The concepts of paid work and housework

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The Family and the Declining Birthrate, Pension Rights, and Child-Care Insurance in Japan

The “supportive wife” component is assumed to be reflected in the husbandʼs income. In otherwords, a portion of the husbandʼs pay is the result of the wifeʼs work. The other component, on
the other hand, is not directly connected to the earning of money. However, services provided in
the home generate what is called imputed income. For example, the imputed income of a French
dinner cooked at home would be the cost of that same dinner if consumed at a restaurant. Thismeans that the full-time housewifeʼs contribution to household finances is equal to a portion of
the husbands income + imputed income.
Yet, these amounts are difficult to monitor. As a result, it is difficult for society and the family
to assess the labor of the housewife fairly. This inability to assess performance in the homefairly has an adverse effect on the wifeʼs satisfaction with married life and may thus destabilize
the family.
There is also the question of caring for the elderly and raising children. This does not contributeto the husbandʼs income, as described above, and thus must be included in the category of “workdone to raise the quality of the home life.”
Yet, with the introduction of social insurance, care of the elderly is now considered theobligation of society. Under the insurance system, service and benefit levels are based on personal
contributions, and consumers can select their own services with foreknowledge of the personal
contributions required. Similarly, the introduction of nursing insurance takes nursing care outof the home and provides an opportunity for an objective assessment of its economic value.
However, this concept has not taken root with child-rearing. It is generally believed that the
full-time housewife should dedicate herself to child-rearing as her most important duty. This
makes it difficult to assess the value of child-rearing fairly and may be a major factor in the
anxiety full-time housewives feel regarding child-rearing.

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Yoko Nakagaki

The downward spiral of part-time work
Part-time work is becoming more common for women once their children are a little older andthey have more time. This trend represents an effort to shore up household finances in the faceof the waning job security and sluggish income growth that have been experienced since thecollapse of the bubble economy in the 1990s. Businesses like part-time workers because they arecheap and make for an adjustable workforce. While there is a dearth of full-time employment
opportunities, there is an over-abundance of part-time opportunities.
However, wages for female part-time workers are continuing to decline against wages forfull-time female workers (see Figure 11). The wage gap between full-time male workers andfull-time female workers is closing, and as a result, the wages for part-time female workers
versus full-time male workers are not changing much. Wages for part-time female workers areusually 40% that of full-time male workers.

Comparison of Wages for Part-time Female Workers

Full-time female worker = 100

Full-time male worker = 100

1992

71.8

44.6

1993

70.1

43.7

1994

70.6

44.3

1995

70.4

44.5

1996

69.3

44.0

1997

68.0

43.4

1998

68.4

44.3

1999

67.3

44.0

2000

66.9

44.3

2001

66.4

43.4

Figure 11

Comparison of hourly wages for full-time work and part-time work

Source: Ministry of Health, Labor and Welfare, Wage Structure Survey
This situation exists—despite rising trends in part-time wages—because many married women
seek to keep their annual income below ¥1 million by restricting their work, as a result of thecurrent tax and social welfare system and family allowances provided by companies (see Figure
12).
Specifically, the upper limit for the deduction for spouses is ¥1.03 million; the upper limit for
dependants and spouses in the national pension plan and similar services is ¥1.3 million; andmany businesses set the upper limit of their family allowance to either ¥1.03 or ¥1.3 million.
Thus, the wives of salaried workers are restricting their working hours to remain within theselimits. This explains the relatively slow growth in part-time wages.

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Income (10,000 yen)
700

Household income

Special Exemption for Spouses from local taxes starts
shrinking when wife’s annual income exceeds ¥750,000.
Husband’s spouse allowance is lost.

500

Special Exemption for Spouses from

Husband’s income taxes starts shrinking when wife’s
annual income exceeds ¥700,000.
incomeWife with income of ¥103,000 orabove required to pay income tax

Husband’s Special Exemption for
spouses reaches zero.
Wife with income of ¥130,000 or above
required to pay social insurance premiums

Wife with income of ¥100,000 or above
required to pay local taxes

Wife’s income

0

1,000

2,000

Wife’s annual working hours
Figure 12

Household income for households with working wives

Notes:
1.

Ministry of Health, Labor and Welfare, “Basic Survey of Wage Structure,” (2000),“Monthly Labor Statistics Report,” (December 2000), “General Survey of Work Hours
and Other Labor Statistics,” (1997), Social Insurance Agency, “Annual Report” (1999)

2.

Pension payments were calculated from premium payments, and were deducted fromincome.

4t

Source: Cabinet Office, Government of Japan, White Paper on National Lifestyle (2002)
With the introduction of the special deduction for spouses in 1987, the ¥1.03 million barrier
disappeared from the tax system. Nevertheless, part-time wages for women as of 1995 werestill overwhelmingly in the in the ¥0.9 to ¥1 million range despite the change, due in part tomisunderstanding, and few women earned more than ¥1 million. However, while the majority
were still in the ¥0.9 to ¥1 million range, there was a notable increase in the number of women
earning ¥1 to ¥1.1 million, according to a 2001 survey, which indicates the relative importanceof the ¥1.3 million barrier.

IIPS 2003 ◆ 16

Yoko Nakagaki

1995

25
20

%

2001

15
10
5
0
040

4050

5060

6070

7080

8090

90- 100- 110100 110 120

120- 130130 140140150

Unit: ¥10,000
Figure 13

Source:Income distribution for female part-time workers

Ministry of Health, Labor and Welfare, Comprehensive Survey of Part-timeWorkers

In other words, women who are working to contribute to the family are ironically met withdifficult conditions that make it less advantageous to do so.
The likelihood of raises or promotions for part-time workers is also low. The disparity between
full-time wages and part-time wages grows with the number of years of service; naturally, theproportion of part-time workers who are not content with this disparity is greater among parttime workers who have worked for longer. Of part-time workers with ten to 19 years of service,
the majority are not satisfied with this situation. While more women are going on to higher
education, the value of their work is not recognized after they return from temporary leave to
get married and have children. Their options are also limited to part-time work, where there islittle chance for raises or promotions, and this may be one cause of the increasing number ofwomen who choose not to get married and have children, and of dissatisfaction with married
life itself.

Solutions for the Future
The male work model does not permit division of responsibility within the home, and as a result,
women are left with two choices: forego children and continue working full time, or work in
the home and work part-time when possible. It is difficult to economically assess work within
the home and part-time employment—work done mostly by married women. Meanwhile, there
is no surplus of resources for today's families, even by international standards.
For women confronting these inconsistencies surrounding the family, dissatisfaction withmarried life is relatively high. This factor further accelerates the shift towards small households
and destabilizes the family.
To make it easier to form families, the economic value of women's work within the homeand part-time work should be established, and it should be possible to share the responsibilitiesof earning income and working within the home.

17t IIPS 2003

The Family and the Declining Birthrate, Pension Rights, and Child-Care Insurance in JapanThe following points are important to achieving this.
1) The tax and social welfare systems should include, to the degree possible, an economic
assessment of work done in the home. This will result in higher value placed by families andsociety on work done in the home.
2) Just as with nursing care, the society should provide assistance for child-care, assistancemade necessary by the faltering child-rearing capacity of families. The economic value ofchild-rearing should be established.
3) The economic disincentive to working part-time should be abolished because part-timework is compatible with working in the home. Equal pay for equal work should be established
as a basic rule.

Economic Assessment of Work Done in the Home and theTax and Social Welfare Systems
Work done in the home and the basic and special exemptions for
spousesWork done in the home and taxation
Work done in the home by wives is reflected in the income of the husband and in imputed
income for the home.
Taxes on the husband's income could be said to be taxation of the combined contributionsof the husband and the wife, but imputed income is not taxed.
The basic and special exemptions for spouses
The subject that often comes up in relation to work done in the home and the tax system is thebasic and special exemptions for spouses. Tax exemptions are tied to the wife's income, the idea
being that when the wife of a salaried husband has little or no income, the husbands ability to
pay taxes is decreased. In addition to the basic exemption for spouses (with a flat exemption
for spouses with annual incomes from ¥0 to ¥1.03 million) there is the Special Exemption for
Spouses, which uses a sliding scale (see Figure 14).
Work done in the home and the basic and Special Exemptions for Spouses
As was described above, the income produced by the husband and wife as a team is taxed
as the income of the husband. However, they are possibly paying more than they would if a
progressive tax schedule was applied. In this light, the basic and special exemptions for spouses
can be looked at as an effort to correct this inequity. Yet, this interpretation is shaky, consideringthat these exemptions for spouses are applied universally, even if the income tax rate were as
low as 10%.
On the other hand, imputed income is not taxed because it is simply too difficult to
calculate.

IIPS 2003 t 18

Yoko Nakagaki

Exemption given to taxpayer(Units: ¥10,000)
76,
71

Spouse’s income (up to 70,000)
75
80

66
61

maximum
38

56
51
46

Special Exemption
for Spouses

90
95

to be suspended from
2004

41

85

100

38
36
31

up to 103
up to 105
110
115
120

26

125

Basic Exemption for Spouses
38

21
16

Special130
Exemption
135
for
140
Spouses
up to 140
141

5
3
0
0 (to 65)

103

Qualifying spouses

141

Spouse’sincomeNon-qualifying spouses(live jointly with taxpayer, income not exceeding ¥3.8 million)
Figure 14

Source:Exemptions for spouses and the Special Exemption for Spouses

Ministry of Finance website

In any case, the tax burden on the husband's income is reduced through the two exemptions
for spouses, based on the assumption that the wife is an economic burden in the same category
as children.
What this comes down to is that society does not assign the proper value to the work of thewife within the home, and this may lead to inaccurate valuation within the family.
Policy implications
Against this background, the Special Exemption for Spouses was abolished and will be removed
starting in 2004. The special exemption was introduced during the sweeping changes to thetax system in 1987 to ameliorate the suppressive affect on working wives that occurred whena wifeʼs income exceeded the ¥1.03 million limit and resulted in a large tax increase for thehusband. However, the introduction of the “vanishing exemption” portion shown in Figure 14
would have been sufficient to achieve this goal. However, the introduction of the “additional”
portion also increased the difference between the tax rate when both exemptions for spouses
were applied and when they were not. The fact that the combined exemptions for spouses wasbigger than the exemption for dependent children implies that the economic burden imposedby the wife is greater than that of the children.
19 ◆ IIPS 2003

The Family and the Declining Birthrate, Pension Rights, and Child-Care Insurance in Japan

So the cancellation of the additional portion will be a big step forward. Yet the basic exemption
for spouses remains. If the value of the wifeʼs work (including imputed income) were fairly
evaluated, would this be necessary? At present, tax deductions for people are being simplified.
A system that makes a blanket decision about the economic strengths and weaknesses of people
based on age or sex has a direct impact on the family structure. As shown earlier, old values area barrier to marriage, and they reduce satisfaction with married life, which tends to destabilize
the family unit. Likewise, any system that tries to mold the family unit into a certain shapeleads to destabilization of the family unit. From this point of view, even more drastic revisions
are in order.

Assessment of work done in the home and the pension system
Tertiary-insured system
Let us take a look at the pension system.
The wife of a salaried worker becomes tertiary-insured if she makes less than ¥1.3 million ayear and works less than three-quarters of a full-time schedule. In this case, she does not haveto make premium payments for pensions or health insurance. As an employee, the husband is
the secondary-insured (see Figure 15). The pension paid to the secondary- and tertiary-insured
is based on the total premiums paid by the secondary-insured. The husband receives the basic
pension plus the proportional pension, and the wife receives the basic pension.
WelfareAnnuity Pension Fund,(11,690,000
participants)(End of FY99)

Qualified
Retirement
Pension(10,001,000
participants)

ProxyportionWelfare Annuity
Pension (32,480,000
participants,
including three former co-op funds)

National Pension Fund
(76,000 participants)

Occupation
portionCo-op
Pension(about527,000
participants)

National Pension(basic pension)

Self-employed
et al

Dependent
spouses ofsecondaryinsured

About 21,180,000(primary-insured)

About 11,690,000(tertiary insured)Figure 15

Source:Salaried workers in theprivate sector

Civil
servants
et al

About 37,750,000 (secondary insured)The pension system

Ministry of Health, Labor and Welfare website
IIPS 2003 ◆ 20

Yoko Nakagaki

The tertiary-insured system was introduced as part of the system reforms of 1985 to secure
pension rights for women, including full-time housewives. Thereafter more and more married
women began working part-time, but notably restricting their work load to come in under ¥1.3
million per year and avoid the increased company insurance premiums that accrue when annual
income exceeds that amount (see Figure 12). The secondary-insured pay pension premiums
for tertiary-insured, and the secondary-insured group includes married women who work andsingle-women and single-mother households. The inequity for these women is often a subjectof discussion (see examples 1 and 2).
Example 1: Current System

Full-time housewives married to salaried workers
AmountHusband

Proportional
pension¥85,500

Basic pension¥67,000

Wife

Monthly
Wage(husband)¥390,000

Premium¥53,000

Pension¥219,500¥67,000

Example 2: Current System

Single women and other categories

The premium is the same, but thepension amount differs.

AmountProportional pension¥85,500

Basic pension¥67,000

Monthly Wage

¥390,000

Premium¥53,000

Pension¥152,500

Wives who work in the home and the tertiary-insured system
How does this system assess the work of women in the home?
The fact that the tertiary-insured receives a basic pension might lead one to believe thatthat the system acknowledges the wifeʼs contributions to the husbandʼs wages from which
the premiums are paid. If so, it does not make sense that the pension received by a household
consisting of a salaried husband and a full-time housewife should be more than that received
by a working woman who is single, since the single working woman pays just as much inpremiums as the husband.
The premium also does not take imputed income into account.

21 ◆ IIPS 2003

The Family and the Declining Birthrate, Pension Rights, and Child-Care Insurance in Japan

Even if the pension amount received by the wife represents a social assessment of the valueof child-rearing, it is still inequitable when compared to single-mother households, where one
person has to raise the children and bring in the income.
Proposed reforms
The Research Committee on Pensions and Responding to Changes in the Lifestyle of Women
established in the Ministry of Health, Labor and Welfare discussed the various problems related
to women and the pension system. Their December 2001 report discussed the taxation of imputed
income, and it stated, “the opinion that households where one parent works are more able to pay
premiums than households where both parents work, considering the imputed income generated
by work done in the home, needs to be examined in greater detail.”
In other words, a consensus on imputed income is difficult to come by, so it is hard to take
into consideration at this time. This supports the opinion made throughout this paper that workthat does not generate cash income, like work done in the home, is difficult to assess fairly. In
particular, the amount of imputed income each household receives varies widely, and much ofit cannot be evaluated objectively, such as home-cooked meals or the atmosphere in the home.
Thus, it is unlikely that imputed income will be figured into calculations of insurance premiums
as part of near-term system reforms.
So what should be done?
The Ministry of Health, Labor and Welfare released the Substance and Direction of the Pension
Reform Framework in December 2002. This report was created as a platform for discussing
pension reforms for 2004. It included the following proposals regarding the tertiary-insured.
i) Proposal on Separation of Pension Rights for Husbands and Wives
The secondary-insured will continue to pay insurance premiums in proportion to the amount of
remuneration; however, the benefit should be treated as if the household income was divided.
ii) Proposal on Adjustment of Premiums
Tertiary-insured should be required to pay a premium in some capacity.
For the employee group, the benefit principle (premiums of fixed amounts) is combinedwith the principle of the ability to pay (fixed-rate premiums).
The insurance premium for the tertiary-insured should only be assessed on secondaryinsured who are with a tertiary-insured—not on the entire employee base—and the rate should
be fixed.
iii) Proposal on Benefit Adjustment
Tertiary-insured will not be required to make insurance premium payments, but the basic pension
benefit should be reduced.
iv) Proposal on the Reduction of the Tertiary-Insured
The number of people that qualify as tertiary-insured should be restricted through introductionof a national pension for short-term workers.

IIPS 2003 ◆ 22

Yoko Nakagaki

Separation of pension rights
Implications for households with full-time housewives
Let us look at the first proposal to separate pension rights for husbands and wives. This is
illustrated in example 3.
Example 3: Separate Pension Rights

Full-time housewives married to salaried workers
AmountHusband

Wife

Proportional pension¥42,800¥42,800

Basic pension¥67,000¥67,000

Monthly Wage (husband)¥390,000

Premium¥53,000

Pension¥219,500

The difference between this and Example 1 is the proportional portion for husbands andwives.
Example 1: Current System (repeated)

Full-time housewives married to salaried workers
AmountHusband

Proportional pension¥85,500

Basic pension¥67,000

Wife¥67,000

Monthly Wage

¥390,000

Premium¥53,000

Pension¥219500

In other words, looking at total household finances, the premiums and the benefits do not change.
The burden on the employed person does not change. What changes is the amount paid to thehusband and wife. The amount paid to each person should be based on the contributions by thewife to the husbands income, and this should be decided separately for each home (in example
3, it is distributed 1:1, but this should not be applied universally).
This separation of pension rights will be useful in that it clarifies the social assessment of work
done in the home by housewives, and it gives the wifeʼs right to a pension a proper basis.

23 ◆ IIPS 2003

The Family and the Declining Birthrate, Pension Rights, and Child-Care Insurance in Japan

Implications for double-income households
Taking this concept further, what about the contributions of the husband to the wifeʼs income
in a double-income household? There are also various arrangements for the division of laborwithin the household. Where both people are working, the pension derived from their income
should be combined and then divided based on the situation at home.
Under the current system, example 4 applies to a pension for a couple where the husband
makes ¥260,000 per month and the wife makes ¥130,000, but this would fall under example 5
if they were combined and divided in half.
Example 4: Current System

Double-income households
AmountHusband

Wife

Proportional pension¥57,000¥28,500

Basic pension¥67,000¥67,000

HusbandMonthly Wage

¥260,000

Premium¥35,300

Pension¥124,000

Monthly Wage

¥130,000

Premium¥17,700

Pension¥95,500

Wife

Example 5: Separation of pension rights

Double-income households
AmountHusband

Wife

Proportional pension¥42,800¥42,800

Basic pension¥67,000¥67,000

HusbandMonthly Wage

¥260,000

Premium¥35,300

Pension¥109,800

Monthly Wage

¥130,000

Premium¥17,700

Pension¥109,800

Wife

IIPS 2003 ◆ 24

Yoko Nakagaki

Notice that the amount of pension a full-time housewife receives with the separation ofpension rights is ¥109,800 (example), which is higher than the amount she received under
the current system with a monthly income of ¥130,000, which is ¥95,000 (example 4). If theseparation of pension rights is applied only to full-time housewives, the premiums paid byworking housewives is lost to them. Thus the separation of pension rights must be applied
equally to double-income households.
Implications for divorcees
Under the current system, divorced full-time housewives are only entitled to the basic pension(¥67,000 per month, the same as the wife in example 1). This figure is extremely small consideringthat women re-entering the workforce are mostly part-time workers. It is also uncertain how thepension should be handled in the separation of assets as part of the divorce.
Introduction of the separation of pension rights would allow the divorcee to receive ¥109,800,
the same as the wife in example 3, which is a big improvement.
Implications for widows
On average, Japanese husbands are two years older than their wives. Yet the average life spanof women is seven years longer than that of men. This means that, on average, a wife will spend
her last nine years as a widow.
The elderly wife of a former salaried worker can select one of the following three options
for receiving pension benefits (the survivorʼs pension system).
1.
2.
3.

Wifeʼs basic pension + 3/4 of the husbandʼs proportional pension
Wifeʼs basic pension + wifeʼs proportional pension
Wifeʼs basic pension + 1/2 the husbandʼs proportional pension + 1/2 the wife's
proportional pension
In most cases, however, the wifeʼs proportional pension is relatively small or non-existent,
so the first case is by far the most common. The standard benefit amount in this case, basedon example 1, is ¥67,000 + (3/4 x ¥85,500), which is better than the ¥67,000 currently given
to divorcees.
This system is said to strongly favor marriage, but it does not even come close to being a fairassessment of the wifeʼs labor. As a result, there is no way to show that divorcees provided lesssupport to the working husband during the premium payment period than women who stayed
married throughout.
Assuming that the wife worked enough to receive a proportional pension, as in example 4,
and that she outlives her husband, the ¥67,000 pension she receives based on her own premium
payments plus the ¥28,500 is still less than the ¥67,000 plus three-quarters of ¥57,000 for
survivors, which makes her own premiums a waste of money.
This inconsistency is also solved by the separation of pension rights. In other words, if theseparation of pension rights is going to be implemented, the abolition of the elderly spouse
portion of the survivors pension system should be considered.

28
25 ◆ IIPS 2003

The Family and the Declining Birthrate, Pension Rights, and Child-Care Insurance in Japan

Revision of the definition of tertiary-insured
So far, this discussion has focused mostly on the separation of pension rights; however, thetertiary-insured qualifications and the ¥1.3 million income and 3/4 work hours restrictions also
merit further attention. The position expressed in this paper is that premium payments can beassessed on imputed income. Moreover, wives should pay insurance premiums from any cash
income that they have. Naturally, the costs to employers and other factors are factored in, it
would seem practical at this point to reduce the number of tertiary-insured.
Towards a system favorable to families
Rethinking the Restrictions on Separate Pension Rights and the Role of the Public Pension
Even these reforms will not resolve the essential difficulty of assessing imputed income
and the essential inequities in terms of burdens and benefits between unmarried households
and households with people in the tertiary-insured category. If imputed income is figured in, it
makes most sense to require the tertiary-insured to make individual payments.
As stated earlier, it will not be easy to work out the proper premium for such income. The
suggestion of setting a fixed amount temporarily is also a problem. The primary-insured groupis made up of all others besides salaried workers and their spouses, and this group has a fixed
payment and fixed benefit for the basic pension amount; however, the balance between the twois often a point of discussion.
In the Ministry of Health, Labor and Welfare proposal, the proposal seeking a specific tax
for tertiary-insured (proposal 2) does not consider fixed premiums, but instead presents two
proposals for fixed rates on the employee group. Yet, in a system where the entire employee
group supports the tertiary-insured, there is a problem of inequity for single people. The otherproposal of fixed-rate premiums for secondary-insured who have a tertiary-insured spouse has
an implementation problem in that the company is paying the employerʼs portion along withthe husbandʼs premium, which makes the employer responsible for processing and paying thewifeʼs portion. This issue makes it difficult to form a consensus.
Essentially, as long as the system is designed around the concept of the salaried worker andthe dependent spouse, it will never truly become a safety net for new families, no matter whatchanges are made.
Therefore, separate pension rights reform should be considered as just the first step inbreaking away from a system premised on one family structure that was popular during thehigh economic growth period.
Taking the discussion of imputed income further, if this is difficult to calculate, then the
public pension system should be reviewed to see if radical reforms can be implemented, suchas turning the system into a basic safety net for the entire population, regardless of work or
family arrangements, and entrusting the extra portion for the elderly to individual efforts. Morespecifically,

IIPS 2003 ◆ 29
26

Yoko Nakagaki

1.

2.
3.

The basic pension amount should be based on a fixed payment and fixed benefit,
regardless of family or work arrangements (the premium for full-time housewives shouldbe paid by the husband, taking into consideration imputed income and contributions to
the husbandʼs income).
The proportional component and the employee pension insurance benefit component
should be privatized.
The portion of public funds used to fund the basic pension should be increased.

Social Support for Child-Care/Introduction of Child-Care
Insurance
The importance of socializing child-care
The current nursing care insurance system is still in the trial and error phase, but it is important
to note that nursing care was socialized due to the limits of family resources. As stated several
times earlier, this is an economic assessment of nursing care.
Child-care should receive the same type of support. There are many arguments against sucha plan, such as “child rearing is the parentʼs responsibility,” and “my children are mine.” Of
course there is no intention of denying parental responsibility. Yet a declining birthrate andpopulation reduction are facts of life, and it is also true that children are the wealth of a society.
It is important to clarify the commitment of the entire society to support parents and others who
have the most responsibility for raising children.
This should be implemented by giving direct support to all people involved in child-care,
whether the mother is working or not. Doing so will show the gratitude of society to people
who raise kids completely on their own, and the necessary services will be provided for those
who need child-care assistance, which will act to preserve the family.

Response to the Varied Views on the Restoration of the Birthrate
As the birthrate drops, discussion of the subject is heating up.
The maintenance of socio-economic power, the restoration of Japanese traditions, support forfamilies who want to have children but who do not have the resources, realization of womenʼsrights—these are the focus of some discussions. Many of these views conflict, and this is one
barrier to a decisive policy on recovery of the birthrate.
Here are several examples. To accommodate womenʼs rights and maintain socio-economic
power, women will have to give birth and raise children while continuing to work as a majorpart of the labor pool, and to do this, child-care services and flexible work arrangements are
required. If both parents should be involved in child-rearing during early childhood, child-careby both parents should be supported through increased cash allowances that show the economic
value of child-rearing, and an environment that makes it easier to go back to work after raisinga child. To create a society where families who so desire can enjoy working and raising theirchildren—despite the sacrifice to economic growth—the promotion of work-sharing will be

27 ◆ IIPS 2003

The Family and the Declining Birthrate, Pension Rights, and Child-Care Insurance in Japaneffective. To allow all women to have children regardless of familial or financial conditions,a society should be created that provides support for infertility, regulates abortion, eradicatessocial discrimination against children born out of wedlock, and provides financial incentives
to have and raise children.
In the end, there has been no clear direction for assistance related to child-care, and instead
issues have been ruled by the greatest common denominator. Unfortunately, it may well be
impossible for Japan to achieve a consensus on this problem. If no consensus is reached, it
will be difficult to change from the status quo to a position that accommodates a diversity oflifestyles.
From this point of view, financial support should be radically increased for all people who
raise children and for child-rearing as an activity. Given the present situation, the best solution
would be to construct a system that provides options for support, either in the form of cash or
benefits.

Child-Care InsuranceChild-care insurance should be public insurance in which all people can participate, just likenursing care insurance.
Basic structure
The insurance system should be one that the entire public can participate in, and should provide
a range of services that people can choose from when they have a need for child-care services.
Services should be provided unconditionally, whether the mother works or not and irrespectiveof whether the parents have a high income. There are also people that do not require outsideservices. This is why economic support for child-care as an activity should also be provided in
the form of cash payments.
The merits of an insurance system
One merit of an insurance system is that the relationship between premiums and benefits isclear. It is important to show that society as a whole should support child-care and that services
and cash benefits represent that support.
Some criticize insurance and other systems that provide support based on the needs of theparents and others on the demand side, saying that it is meaningless if the supply of services
is inadequate. However, with the rising costs of publicly provided child-care services,supplementing the demand and creating service options is necessary to create supply-sidecompetition that will increase the chance of obtaining better services. Essentially this means
introducing a voucher system.

IIPS 2003 ◆ 28

Yoko Nakagaki

Centralized management of revenue sources, public pensions, and nursing careinsurance
If the insurance system was set up independently, people who did not intend to have children
and people who have already had children would not participate. Incentive for all people tocontinue paying into the system must be provided, and a practical solution would be to collect
all payments for public pension and nursing insurance together. The ratio of financial support
for the elderly versus children is markedly biased towards the elderly in Japan, when comparedwith other countries, and this ratio needs to be rethought (see Figures 16 and 17). Since increased
support will be needed for pensions and nursing insurance in the future, a consensus should beeasy to achieve. Revision of all tax exemptions for people is also important for revenue sources.
Naturally, this also requires revision of the roles of government agencies and their involvementin the tax and social welfare systems.

Figure 16

Source:Country

Ratio of services for the young toservices for the elderly

United Kingdom

0.50

US

0.30

Denmark

1.37

Finland

0.94

Norway0.83

Sweden0.92

France0.48

West Germany

0.20

Japan

0.18

Services for the young and the elderly, an international comparison (1992)

Figures for both Scandinavian and G5 Countries are taken from EspingAnderson, “Social Foundation of Post-Industrial Economies.”

29 ◆ IIPS 2003

The Family and the Declining Birthrate, Pension Rights, and Child-Care Insurance in Japan

Rank

Support for general households

Support for double income households

1

Belgium

Sweden2Germany

Denmark

3

FranceFinland4

NorwayNorway5

Italy

France6Austria

Belgium

7

Denmark

Germany

8

Ireland

Italy

9

SwedenNetherlands

10

Finland

Austria

11

Netherlands

Ireland

12

CanadaUK

13

UK

Canada14

Switzerland

Japan

15

Japan

Australia

16

Australia

Switzerland

17

New Zealand

USA

18

USA

New ZealandFigure 17 Policies of general support for families and support for double-income families(1985-2000)

Source:Gender Equality Bureau, Influence Research Committee, “Report on Lifestyle
Choices and the Tax, Social Welfare, and Employment Systems.”

Correcting the Gap between Full-timers and Part-timers
As stated earlier, the majority of women work part-time after raising their children, and conditions
for part-time female workers are markedly worse than for full-time male workers. In the end, once
women stop working full-time to get married or have children, they are not fully appreciated,
whether they work exclusively in the home or whether they try to re-enter the workforce.
Underlying this problem is the fact that Japanese companies have made decisions about
wages that are not based purely on productivity, because the full-time male employees have fora long time been the sole source of financial support for the family. Yet, changes can be seen in
the customary Japanese systems, such as long-term employment and seniority, and the shift toa performance-based wage system for full-time male employees may improve the position ofpart-time workers. This opportunity should be used to do away with the de facto gap between
the part-time and full-time labor markets.
Theoretically, the achievement of equal pay for equal work would resolve this problem. In
other words, society should ideally pay wages commensurate with results, regardless of thepersonʼs part-time or full-time status at home or in the office.

IIPS 2003 ◆ 30

Yoko Nakagaki

To create such a society, the government must make the tax and social welfare systems neutral
with regard to working style.
In addition, more options must be provided to the Japanese labor market, where there are
currently only two extremes to choose from. Such choices would include jobs with responsibilities
that could be done for shorter periods of time (say by short-term, full-time employees), more
options for moving from part-time to full-time positions, and equal treatment for part-time andfull-time workers.
This is a problem not only for married women but for all individuals. In other words, fulltime work is necessary to maintaining an independent household, but this makes taking care ofchildren and the elderly difficult, and with households continuing to get smaller, it will become
harder to have a family.
To create a society that allows people to have families, flexible work arrangements arenecessary to permit work in the home along with work that provides sufficient income.
In an age where company-specific skills loose their value, and the building of self-selected
work skills is the best guarantee for the future, the introduction of a variety of work arrangements
is very important, because it will allow people to increase their marketability while working at
a company, or even during long absences.

Conclusion
The family unit established by Japanese society during the high economic growth period was
one in which the man had to put work before everything else, and any work not recognizedeconomically by the market was done by women.
Clinging to this system will further reduce the size of households and destabilize thefamily.
To make way for diversified work styles and lifestyles, it is vital that the labor market beeasier to enter by providing equal pay for equal work, and that child-care be supported by theentire society.
The discussion about the declining birthrate is heating up, but the inability to achieve a
consensus on the concept of the ideal society is without doubt the barrier to success for a
declining birthrate policy. Yet it is probably impossible to get everyone to agree to the sameideal, considering the diversity of values. This is precisely why a child-care insurance systemthat makes allowances for many possibilities is called for.

31 ◆ IIPS 2003

The Family and the Declining Birthrate, Pension Rights, and Child-Care Insurance in Japan

Notes
1

National Institute of Population and Social Security Research, Household Projections for Japan(March 2000 estimates).
2 Cabinet Office, Government of Japan, Survey on National Lifestyles (2002).
3 Cabinet Office, Government of Japan, National Survey on Lifestyle Preferences (2001).
4 National Institute of Population and Social Security Research, National Fertility Survey, 1997.
5 In a survey of single working women in their thirties, 90% said that they “wanted to marry,” but
30% said that they “did not want to live together, even if married.” (OMMG, 1998).
6 Median value taken from the 2002 estimate by the National Institute of Population and Social
Security Research.
7 Dentsu Communication Institute, “Comparison of Values Internationally,” (FY01).
8 Cabinet Office, Government of Japan, “Survey on Gender Equality in Society” (1997).
9 Only 1.6% of the total births, as of 2000.
10 The Foundation for Childrenʼs Future, “Survey on the Cost of Raising Children.”

IIPS 2003 ◆ 35
32

Yoko Nakagaki

About the author

Yoko Nakagaki is a Senior Research Fellow at
the Institute for International Policy Studies.
She holds a B.A. in economics from the
University of Tokyo. She joined the Cabinet
Office in 1987.

33 ◆ IIPS 2003