Characteristics of the Labor Market for Newly Qualified Childcare Workers from the Perspective of Nursery Schools in the Tokyo Metropolitan Area

In the face of a shortage of childcare facilities, the Japanese government has introduced deregulation under which private companies are allowed to provide childcare. This study investigated how the deregulation has changed the spatial distribution of childcare services and strategies for the employment of childcare workers by nursery schools in Tokyo.Before deregulation, the exclusive suppliers of childcare, other than municipalities, were social welfare corporations with legally protected status. They developed strong connections with schools in charge of training childcare workers, making it easy to hire from a constantly renewed pool of potential employees. Social welfare corporations maintain seniority wage systems and establish new facilities within convenient commuting areas for employees. As a result, social welfare corporations are viewed as desirable workplaces for highly skilled workers such as new university graduates who majored in childcare.On the other hand, private companies have difficulty in hiring qualified childcare workers and expanding their businesses because they lack connections with local childcare vocational schools. They tend to rely on temporary staffing companies to secure manpower as well as to recruit employees from vocational schools in rural areas where salaries for childcare workers are far lower than in the Tokyo metropolitan area.However, private companies have contributed considerably to increasing the supply of childcare services in the Tokyo metropolitan central business district (CBD). While rents are high in the CBD and thus social welfare corporations are deterred from establishing nursery schools there, private companies flexibly expand their businesses wherever childcare services are profitable.Even after deregulation, the subsidy system for nursery schools gives preference to social welfare corporations in comparison with private companies, which may limit the supply of childcare services in proportion to the spatial distribution of their need. Thus, equal treatment for both parties is indispensable to broaden the benefits of deregulation.