One of the most urgent tasks that the government needs to tackle is Japan’s low birth rate. At less than 1.5, it remains well below the replacement rate.
While the reasons for the low birthrate are multiple, the government should do more to make child delivery a less painful process, both financially and physically.
Giving birth in Japan is expensive compared with other developed countries. It entails direct substantial financial costs and involves high indirect costs in terms of lost income and career setback. Finally, whereas other developed countries made efforts to minimize the physical pain associated with child delivery, in Japan the traditional way is favored.
Imagine for a second that the problem of the aging society could be solved if all Japanese women in the child-bearing age would climb Mount Fuji. It would probably take a lot of encouragement to convince every woman to ascend this high mountain. But now assume that you would tell all women that they need to hike barefoot and in addition you would charge them a hefty fee. It is easy to imagine that the number of women who would still be willing to undertake the hike would drastically fall.
This metaphor illustrates the hurdles that women who want children are facing. In Japan, giving birth is not fully covered by the national health insurance. The argument defending this policy is that being pregnant and delivering a child is not a sickness and therefore cannot be covered by health insurance.
The government introduced in 1994 a system to help finance giving birth. This “childbirth and child care lump sum grant” of up to ¥420,000 is payable per child to help families with the costs of birth. However, this amount is not enough. It is estimated that the average cost of delivery is ¥500,000. And in addition, the expecting mothers are asked for co-payments for all checkups before and after giving birth. Overall, the cost that mothers have to bear can mount quickly to several hundred thousand yen. The financial burden is especially high for women who face a difficult pregnancy, as prenatal care is only covered partially by government schemes. These high costs are in contrast with many OECD countries where giving birth is fully covered by national health insurance.
Japanese hospitals favor natural child birth without any anesthesia. The Japan Association of Obstetricians and Gynecologist announced officially that delivery with anesthesia accounted for only 5 percent of total deliveries in 2016. This percentage is extremely low compared with other developed countries, such as 60 percent in the United States and 80 percent in France.
There are three reasons for this low percentage. First, individuals must bear the full expenses of epidural birth, which costs nearly ¥100,000. Second, the number of hospitals that offer the procedure is very limited. Finally, a pain-free delivery can have negative connotations. The traditional view pervasive in Japan is that patience and suffering are a virtue, especially among the older generation.
While there might be medical reasons for foregoing anesthesia, especially in terms of recovery, the consequences are dramatic. We live in a world in which pain and suffering have largely been eliminated. Delivery causes stress and incredible levels of pain for women. Women in Japan should be free to go with a natural delivery or not.
Third, conditions facing the Japanese workforce discourage women from giving birth. The proportion of temporary workers is steadily increasing and is now close to 40 percent. For women the number exceeds more than half. It is stipulated by law that temporary workers have the right to take maternity leave. However, it is difficult for women to meet the criteria due to the limited length of their employment contracts. Consequently, the number of women on a temporary employment contract who can receive the benefits of maternity leave is very limited.
Giving birth thus equals the end of income for women who already were earning meager wages. The government needs to take urgent measures to tackle this problem. As a first step, it should amend the law and relax the criteria for temporary workers to take maternity leave. Another measure could be to facilitate the transition of women into regular employment, so that pregnant women are more protected.
Advancing on all three of these fronts will mean an increase in government spending. However, the additional money would be well spent as it would lay the seeds for a slowdown in the population decline. It would thus be an important step toward re-establish the economic and fiscal sustainability of Japan.
Matthias Helble is a senior economist at the research department of ADBI. Asami Takeda is a project consultant in the research department at ADBI.