Learning from Finland’s “Cash-for-Childcare”

Across advanced economies, falling birthrates driven by changing lifestyles have prompted repeated trial and error in childcare support. The Nordic countries—often held up as models—are no exception. In particular, Cash-for-Childcare (CFC) is a policy Japan can learn a great deal from.

• In Finland, 50% Use Cash-for-Childcare (CFC)
• CFC Is One Option
• Japan’s Childcare Support Is Already Nordic-Level
• CFCs Are Not a Measure to Combat Declining Birthrates

In Finland, 50% Use Cash-for-Childcare (CFC)

CFC began in Finland in 1995 and later spread to other Nordic countries. It provides financial support to bridge the gap between the end of parental leave and the start of publicly provided childcare.

According to Takeda, as of 2014 Finland had the highest utilization rate (50%), while Denmark and Sweden saw relatively little use(竹田 2018). In those two countries, families typically move into childcare services soon after roughly a year of parental leave, so demand for CFC is lower.

Source:For Finland, Norway, and Sweden, based on Nordic Statistics database (2023), compiled by the author. For Japan, based on MEXT, “Current Status of Early Childhood Education” (文科省「幼児教育の現状」（令和2年、幼児教育の実践の質向上に関する検討会資料）), compiled by the author.

By contrast, in Finland the rate of childcare use remains in the 30% range for one-year-olds even after about a year of parental leave, and only reaches the 80% range from age three. The high uptake of CFC appears to reflect the large number of families choosing to care for children at home.

Looking at Japan’s use of childcare services, the situation sits between Sweden and Finland. This suggests there may also be latent demand in Japan for CFC among households that prefer to care for children at home.

CFC Is One Option

Debate over introducing CFC can be colored by ideological divides. Sweden is a classic example: conservative parties have emphasized a “return to the family,” while liberal parties have prioritized “gender equality,” with CFC cast as emblematic of the former. The result was an unstable policy that was introduced and repealed as governments changed.

If Japan were to consider implementation, policy should not be swayed by ideology. Rather, CFC should be presented simply as an option that responds to diverse household needs.

According to the 16th Basic Survey on Birth Trends (National Institute of Population and Social Security Research, 2021)(「第16回出生動向基本調査」（国立社会保障・人口問題研究所、2021）), looking at Japanese women’s employment status before and after the first birth (2015–2019): 17.4% were “not employed before pregnancy,” and 23.6% “left work at childbirth.” Combined, that is 41.0%—a sizable share devoting themselves to housework and childcare.

Among reasons for leaving a job, some cited unavoidable factors such as difficulty balancing work and family, but 20–30% gave positive motives like “to devote more time to housework and childcare” (MHLW-commissioned survey). For these households who prefer at-home care, CFC could be an effective form of support.

Beyond serving as an option for home-care families, CFC also helps ensure fairness. Families using daycare receive not only direct benefits (e.g., child allowances) but also indirect benefits in the form of subsidies to childcare services—amounting to about ¥150,000 per month in the Tokyo metro area for a two-year-old（Itabashi Ward）。Families providing care at home do not receive this indirect benefit. CFC could help close this gap.

Japan’s Childcare Support Is Already Nordic-Level

In comparative terms, Japan’s policy framework for childcare support is already broadly comparable to that of the Nordics. UNICEF’s Where Do Rich Countries Stand on Childcare? (2021) ranks Japan 21st of 41 overall—middle of the pack—but 1st for parental leave. While participation in childcare ranks a low 31st, the enrollment rate for nursery/kindergarten from age three is over 90%, roughly on par with Nordic countries.

Differences in attitudes and values may also be smaller than often claimed. Finland’s largest daily, Helsingin Sanomat, frequently runs pieces lamenting low paternal involvement in childcare. Survey comments such as “my wife is better at childrearing” and “the father’s role is as breadwinner” reflect gendered role perceptions there as well.

Even in Finland, the share of parental leave days taken has been roughly 90% mothers / 10% fathers and largely flat over the past decade. By contrast, Japan’s paternal leave take-up rate has risen sharply—from 1.89% in 2012 to 17.13% in 2022.

Both in policy and in values, conditions in Japanese society are gradually improving. While some in Japan idealize the Nordic model, it is more appropriate not to over-idealize it and instead selectively adopt measures like CFC in ways suited to Japan’s circumstances.

CFC Is Not a Solution to Low Fertility

Economic supports like CFC and improvements to childcare environments are primarily supports for families who already have children. They do not address the core drivers of low fertility in Japan—namely non-marriage and later marriage.

This is evident in the Nordics, which moved early to expand childcare support: comparing total fertility rates in 2010 vs. 2023 across the four Nordic countries, all four experienced substantial declines.

Source: Compiled by the author based on World Bank Open Data (Fertility rate).

In that sense, the Kishida administration’s so-called “unprecedented measures against the low birthrate” are likewise focused mainly on childcare support; their impact as fertility policy should not be overestimated.

(Published with additions and revisions in the August 2023 issue of "EN-ICHI FORUM")

• 国立社会保障・人口問題研究所（2021）「現代日本の結婚と出産 －第16回出生動向基本調査 （独身者調査ならびに夫婦調査）報告書－」、https://www.ipss.go.jp/ps-doukou/j/doukou16/JNFS16_ReportALL.pdf （2025年6月6日アクセス）。
• 竹田昌次（2018）「北欧福祉国家における家庭保育手当（the Cash-for-Childcare）をめぐって−北欧福祉国家型家族モデルを分析視角として—」. 『立命館経済学』第56巻第6号.pp329-345。
• UNICEF（2021） ”Where do rich countries stand on childcare?” https://www.unicef.org/innocenti/media/5431/file/UNICEF-Where-Do-Rich-Countries-Stand-on-Childcare-2021.pdf (Accecced on 6th June 2025).

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