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Is Abe’s free day care and kindergarten worth the cost?

Experts say the money would be better spent on more facilities, staff

by

Staff Writer

Sunday’s general election is over and Prime Minister Shinzo Abe’s gamble seems to have paid off. But politics never stops and Abe is now obliged to carry out what he promised during the campaign.

One of Abe’s most notable — and probably most costly — pledges was to provide free day care services and kindergarten to children up to age 5.

Details of Abe’s plan, however, remain elusive. How much exactly will it cost? What are the pros and cons of his pledge?

Following are questions and answers on Abe’s ambitious, yet contentious, plan to provide free day care and early childhood education:

What precisely did Abe promise during the campaign?

On Sept. 25, just three days before he dissolved the Lower House for the snap election, Abe announced that he would allocate about ¥2 trillion a year for five new social security and education programs.

These include free day care services and kindergarten classes for all children aged 3 through 5. Children 2 years old and under from financially strapped households would also be given free day care services.

These programs would be financed through the planned consumption tax hike to 10 percent in October 2019, up from the current 8 percent.

Until now, the government had been planning to use ¥4 trillion of the additional ¥5 trillion per year in revenue from the tax hike to pay down the snowballing national debt.

But under Abe’s plan, only ¥2 trillion would be used for the debt.

According to the Finance Ministry, the government debt amounted to 230 percent of the country’s gross domestic product as of 2016, the worst among major developed countries.

How much would it cost to provide free day care and kindergarten classes?

Abe’s government hasn’t revealed a detailed breakdown, and nobody seems to know the exact cost. But it will probably take nearly ¥1 trillion a year and may increase further down the road.

According to a rough estimate by the Cabinet Secretariat, the central government would have needed to spend an additional ¥730 billion to provide free day care and kindergarten classes for all children aged 3 to 5 as of fiscal 2016.

As for free day care for children aged up to 2 from low-income households, Abe hasn’t explained how he would define “low-income household,” making any cost estimate impossible.

But according to the Cabinet Secretariat, if the annual income cap is set at ¥3.6 million, it would cost the government ¥50 billion a year, while it would cost ¥230 billion a year if the cap is set at ¥6.8 million a year.

But these estimates are based on data from fiscal 2016. If preschool facilities are made free of charge, more parents are likely to apply, which could push up the total cost considerably.

Free child care service sounds nice. Are families with small children happy with Abe’s plan?

Not necessarily. For a vast amount of child-rearing families, getting free day care and kindergarten isn’t their priority, experts say.

“Many children have been on the waiting list for day care centers, and this problem has not been solved for years. More people want (the government) to address this situation first, rather than eliminate day care center fees,” said Mika Ikemoto, a senior researcher at Japan Research Institute.

Indeed, a large number of children are still on day care waiting lists. As of April 1, about 26,000 children who had applied for the service were unable to get a slot in a certified day care center due to the acute shortage of facilities and qualified workers.

The number has increased three years in a row, as more women want to return to work after giving birth.

Ikemoto pointed out the government has already been providing considerable help with day care costs for financially strapped families. In fact, the government exempts such costs for families living on welfare. Additionally, fees are reduced significantly based on household income.

“At present, people aren’t complaining so much about money. Rather, many people are willing to pay more if they can receive education and services of better quality,” she said.

But the Abe government doesn’t seem particularly interested in the quality of day care services, Ikemoto said.

For example, unlike many other advanced countries, Japan lacks an official evaluation system to check the daily operations of nursery facilities, Ikemoto said.

The low pay for qualified day care workers meanwhile has resulted in an acute labor shortage. The government should spend more money to address problems like this, rather than eliminating fees for nursery facilities, Ikemoto said.

What are the pros and cons of the government shouldering early childhood education?

Promoters of free preschool education often point to overseas studies showing that early childhood education is effective in boosting life-time income and can even help a country achieve higher economic growth.

But according to data provided by the OECD, 95 percent of Japanese children at age 4 already receive some kind of education, a ratio much higher than, for example, the United States, where the level is 68 percent, according to Hideo Akabayashi, a professor of economics at Keio University.

“Making early childhood education free of charge for children aged 4 and 5 in Japan would only mean that the personal spending which parents are willing to pay would be covered by taxpayers’ money,” Akabayashi wrote in an essay posted June 13 on Synodos, a website devote to academic journalism.

Akabayashi argues that the government should focus on increasing day care centers for children aged 3 or younger, rather than eliminating fees for children aged around 4 or 5.

How many children are currently in day care or kindergarten?

As of fiscal 2013, 1.59 million children aged 3 to 5 were in kindergarten, or 49.7 percent of all children in Japan in that age bracket, according to government data.

Meanwhile, 2.22 million children aged up to 5 were in day care, or about 35 percent, it said.