Family Policies and Female Employment in Japan

Abstract

This paper discusses how childcare and parental leave policies affect female employment by reviewing the international evidence and recent papers on Japan. These papers estimate causal effects of policies by exploiting policy changes, which is a more credible identification strategy than earlier observational studies. The literature on parental leave finds that a more generous leave package tends to delay mothers’ return to work, but it does not have detrimental effects on maternal labor supply in the medium to long run. Some papers also find that job protection around one year can increase maternal employment, but longer job protection has little additional effects. The literature on childcare policies finds that maternal employment does not necessarily increase, because the expansion of childcare may crowd out informal childcare arrangements, such as care provided by grandparents. Findings by recent papers on Japan are largely consistent with the international evidence.