Comment on “Availability of Long‐term Care Facilities and Middle‐aged People's Labor Supply in Japan”

• Date: 01 January 2017
• Published date: 01 January 2017
• DOI: http://doi.org/10.1111/aepr.12165
• Author: Ryuichi Tanaka

Comment on “Availability of Long-term Care

Facilities and Middle-aged People’sLabor

Supply in Japan”

Ryuichi TANAKA†

Universityof Tokyo

JEL codes: J14, J22

Understanding the determinants of labor force participation is one of the most debated

issues in contemporary Japan, which is facing a rapidly aging population. Effective policy

measures are needed to mitigate the negative economic effects due to population aging

and a labor force shortage. In particular, raising female labor force participation is one of

the most important policy targets of the current Abe government.

Individual labor force participation decisions depend on many factors, such as age,

education, marital status, and household income. Kondo (2017) focuses on the availability

of the long-term care facilities for elderly people as a possible determinant of labor force

participation,since a large number of workersare forced to quit their jobs because theyneed

to care for their elderly at home. According to the 2012 Employment Status Survey, about

100,000 workers quit their jobs within one year to become caregivers to the elderly, and

more than 80%of these workers are women.Hence, the provision of affordablecare services

for the elderly is an example of a policy that can promote the labor force participation of

both men and women.

Kondo (2017) tackles this important question by testing the hypothesis that the

availability of the long-term care facilities matters for middle-aged men and women in

terms of their labor supply. For this purpose, an econometric analysis utilizing multiple

sources of data is conducted. In particular, prefecture- and medical district-level panel

datasets on the capacity of long-term care facilities are merged with individual-level labor

supply data from the Labor Force Survey and the Employment Status Survey. Since both

data sources have pros and cons, their concomitant use raises the credibility of Kondo’s

analysis.

Kondo’s main conclusion is that there is no systematic evidence ofa positive impact of

long-term care availability on middle-aged labor supply. Although severalpositive findings

are reported, Kondo conservatively claims that these are not robust findings. Moreover,

Kondo concludesthat the policy change did not bring about an immediateimpact on labor

force participation and that the provision of affordable long-term care services is not the

only solution to encourage labor force participation.

The question is how to interpret Kondo’s results and conclusion that there is no

systematic effect of long-term care facilities on the labor force participation of middle-age

†Correspondence: Ryuichi Tanaka, Institute of Social Science, University of Tokyo, 7-3-1 Hongo,

Bunkyo-ku, Tokyo, Japan. Email: ryuichi.tanaka@iss.u-tokyo.ac.jp

doi: 10.1111/aepr.12165 Asian EconomicPolicy Review (2017) 12, 115–116

©2017 JapanCenter for EconomicResearch 115

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