Firms as Intermediaries in Social Policy: Evidence from Japan’s 2005 Employer Mandate for Work-Childcare Support

This paper provides causal evidence that firms act as important intermediaries in the implementation of social policy. In 2005, Japan introduced a policy requiring large firms to develop action plans to establish or expand their company-specific childcare programs. Using pooled repeated cross-sectional survey data with retrospective fertility and employment histories and a Difference-in-Differences (DD) framework, we estimate the policy's impact on working mothers. The results show significant increases in the uptake of maternity and parental leave and improvements in post-birth employment outcomes, with mothers more likely to remain employed and to return as regular employees after the birth of their first child. However, we do not find robust evidence that the policy affected higher-order fertility. These results highlight the importance of firms as institutional channels for implementing family-friendly policies, while also suggesting that workplace-based measures alone may be insufficient to influence fertility behavior and address Japan’s broader demographic challenges.