Plans are now underway in Japan to increase spending on child-rearing support, and to encourage smaller firms to provide greater support for working mothers.

The Japanese government is proposing a budget of 1.71 trillion yen (about $13.9 billion) this year for child-rearing support, up from 1.52 trillion yen (about $12.4 billion) in 2006. The money will be used to allow more children to attend nursery school, and raise the monthly allowance for women on maternity leave from 40% to 50% of their salaries.

A law that took effect in Japan in April 2005 made it compulsory for companies with over 300 employees to draft an action plan with numerical goals for child-rearing support. Firms that achieve the goals will get official government certification that allows them to display a special logo for recruitment and advertising purposes to show that they accommodate working mothers.

But recently, many politicians and social groups within the country are trying to revise the law so that smaller companies can also receive the certification. These groups are also pushing for a revision that will require companies to disclose their support plans and the progress made in achieving such plans.

These moves to provide greater support for mothers are especially timely, given widespread concerns that Japan might lose its competitive edge in the years ahead. According to a recent estimate, Japan will need 880,000 more working women than there were in 2005, in order to keep growth at around 2%. Even though Japan passed an Equal Employment Opportunity Law in 1986, the participation of women in the labor force is still surprisingly low as compared to other industrialized nations. Although many women are as educated as men, about 70% quit their jobs after having children.

When implemented, the measures will affect both local and foreign firms. Human resource specialists have indicated that for foreign firms operating in Japan, hiring mothers should be seen as a viable option. This is because working mothers are less likely to quit, and are often less demanding when it comes to working conditions, including salary. Some measures worth considering include building in-house nurseries and offering shorter working hours for mothers.