The Effect of Childcare Cost on Female Labor Supply and Use of Childcare Service

In Japan, the waitlist for childcare is a serious problem. This problem deters mothers from working, even if they desire to work. One reason for this problem is the regulation of the market for childcare services. This regulation results in childcare prices that are too low, which prevents an increase in supply. Regulations need to be removed to increase the price of childcare and increase its availability. Increasing the price of childcare may burden mothers, but efforts could be made to soften that burden. One method is to increase the wage level for females. In sum, to address the long waitlist for childcare and increase the female labor supply two things are required: 1) increase the price of childcare services, and 2) increase the female wage level.