Can Child Benefits Shape Parents’ Child-rearing Preferences in Japan? Effects of Child Benefit Policy Expansions

抄録

Many studies suggest that the expansion of the child benefit (CB) policy increases child-rearing spending, as it offers mental accounting properties or a labeling effect. However, it remains unclear whether this increase in child-rearing expenditure is simply an income effect related to the CB expansion, or whether the preference for child-rearing expenditure changes relative to other goods at the same time as the income effect; that is, whether the slope of the indifference curve changes. This study examines the effects of Japan’s CB expansion on parental preferences for childcare and children’s education; we find that, on average, CB expansion increased parents’ priorities for childcare. A subsample analysis revealed that low-income households with children younger than 13 years preferred childcare more, while high-income households with children in elementary school (7–12 years old) preferred better child education instead of decreasing their childcare priorities. These results indicate that the impact of unexpected CB expansion on parents’ preferences for childcare and children’s education differs, depending on the child’s age and household income. The most important implication of this study is that, when expanding CB, governments should carefully choose target households in light of policy objectives and avoid widening the opportunity gap among households, considering the heterogeneous impacts of CB expansion on parents’ preferences for childcare and children’s education.