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‘Womenomics’ to save the day in Japan? Abe’s focus on improving child day care facilities

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January 18
6:29 AM 2016

Japan's status as the third largest economy in the world is currently quite shaky, with a declining GDP and a rather aging population. To combat this grim situation, Prime Minister Shinzo Abe has announced certain big goals without really explaining how they would be achieved.

The 'Abenomics' plan revealed three focus areas. First, a stronger economy, with a GDP target of 600 trillion yen versus the previous 500 trillion yen (GDP being a growing concern as it fell by an annualized 0.8% in the third quarter of 2015, following a decline in growth in the previous quarter,) as reported by CNN Money. Second, better child care support, by increasing the nation's fertility rate to 1.8 births per woman, versus the 1.43 in 2013. Third, a superior social security, which promises improved work-life balance.

These plans are obviously interlinked, and it has all boiled down to one bigger focus area: improving day care facilities for the women in Japan.

While the analysts are skeptical about his new plans, it is very clear that Abe is sure that one big solution to Japan's falling economy would be if more women started working. The only thing that comes in their way is lack of sufficient facilities that can take good care of their children while they are away at work. However, that's easier said than done. The latest study, as of April 2015, as per NPR, shows that around 23,000 children were on waiting lists for day care. The parents have to apply in around 20-30 centers, to get their child into one.

Tokyo's Hato Poppo Nursery School is the most coveted day care center. Its subsidized rates make it possible for families of all income levels to apply. This center takes children as young as 3 months to kindergarten kids and the hours stretch from 6:00am to 8:00pm because of the long working hours.

The battle to get a spot in a day care is so tough, that a term has been coined to describe it - hokatsu which means 'actively searching for a day care'. Most mothers who are keen to work after child birth are forced to give up due to this critical problem.

Abe's ideas may have been frowned upon by the critics, but he has actually addressed a root cause for many off-shooting problems. According to Bloomberg, Masamichi Adachi, senior economist at JP Morgan Securities Japan, said that he is totally in agreement with Abe's plans. "His intention to tackle the demographic issue is good".

However, in a population where 26% is 65 years or over, child care policies now need instant attention. Abe has put forward a huge proposition of building 400,000 child day care centers by 2018, which is currently under review by the government, as well as child care allowance for parents depending upon number of children and household income.

The solution seems quite simple, as Kathy Matsui, the chief Japan strategist at Goldman Sachs, puts it - "If you could raise Japan's female labor participation rate to that of Japanese men, then you could significantly lift the size of Japan's economy." However, she feels that Japanese women are still at a cultural disadvantage as the East Asian nation deems it inappropriate for a woman to be working after child birth, and for men to be sharing the household work.

While there has been progress in motivating women to work, it still remains to be seen how well Abenomics and Womenomics work together in boosting Japan's shrinking economy.

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