Childcare Support Systems in Public Pensions: A Comparison of Korea, Germany, and Japan

Purpose: This paper focuses on childcare support systems within public pension schemes as a measure against the declining birthrate and aging population, and the poverty of elderly women. Most OECD countries have childcare support systems in public pension that recognize a certain period of career interruption due to childcare as a paid employment period in the public pension system, but the support systems and their effects vary from country to country. This paper focuses on the childcare support in the public pensions of Korea, Germany, and Japan, which have similarities among OECD countries in that the concept of typical gender roles in the home is deeply rooted, and compares the characteristics of childcare support systems and their effects on women's pension amounts. Research design, data, and methodology: This paper focuses on the following three points : First, the progress of population aging and declining birthrates, and the relative poverty of elderly women in Korea, Germany and Japan are compared, and the significance of childcare support in women's pension entitlements is explained. Second, the characteristics of childcare support systems and their effects on women's pension amounts in the three countries, each with different public pension histories and structures, are compared. Third, in the conclusion, the implications for improving Korea's Childbirth Credit system are examined with reference to the cases of Germany and Japan discussed in this paper. Results: The research results are the following three points: First, in Korea, since the enforcement of the Childbirth Credit in the National Pension(NP) in 2008, the number of beneficiaries has been increasing every year. However, most of the beneficiaries are fathers, and the system has not achieved its intended purpose of increasing the birth rate and women's old-age pension entitlements. Second, in Germany, the Childcare Period for three years per child in the statutory public pension(GRV) is evaluated as the period of pension premium payment for the average income earner. The beneficiaries are the “mothers“ who actually raised the children, and this has had the effect of significantly increasing the entitlements to old-age pension and the pension amount for women. The financial resources for the Childcare Period are covered entirely by the federal government. Third, in Japan, Category 2 insured persons of the Employees’ Pension Insurance(EP) are exempt from paying pension premiums during maternity and childcare leave, and Category 1 female insured persons of the National Pension(NP) are exempt from paying pension premiums for the four months before and after childbirth. The financial resources are borne by all insured persons of the NP and EP, and there are no subsidies from the government. Implications: The following three points are proposed to improve the Childbirth Credit system in Korea, taking into account the measures of Germany and Japan introduced in this paper: First, the credit period should be extended to three years per child, and the beneficiaries should be the parent who actually raised the child. Second, the financial resources should be covered by government subsidies, because child-rearing is an issue that affects all of society. Third, the pension premium payment system during maternity leave and childcare leave should be changed from an “Exceptions to Payment” and “Deferred Payment” of pension premiums to “Payment Exemption” as in Germany and Japan.