The Nippon Foundations Research into Child Poverty

The Nippon Foundation report estimating the economic loss from child poverty
Although the problem of child poverty is an extremely important issue, there has
been almost no research or writing that quantitatively analyzes the impact of child
poverty on society.
To make more people realize that child poverty is not just someone elses
problem, but is an issue that affects everyone in Japan, The Nippon Foundation
estimated, for the first time, the economic impact of leaving child poverty
unaddressed.

The survey started with the assumption that economic gaps among children lead to
disparities in education, which in turn result in differences in future income, and
then compared the two scenarios of leaving the current situation unaddressed and
implementing measures to reduce disparities in education.
In Japan, the level of education completed and whether or not a person is a regular,
full-time employee are reflected in income levels, meaning that disparities in
education have a major impact on lifetime earnings.
Under the improved scenario, the number of college graduates increases and more
people are regular, full-time employees, and their lifetime earnings increase relative
to leaving the current situation unchanged. In addition, as an individuals income
rises they also pay more taxes and social security premiums, reducing the
governments fiscal burden by that amount.

Calculating these differences as a loss to society, the economic loss of leaving child
poverty unaddressed comes to approximately 2.9 trillion yen for just one school
year of children, and the governments fiscal burden increases by 1.1 trillion yen.

Loss to society from child poverty (for the one school year of todays 15-year-old
children)
Scenario Income Net tax and social security burden Persons in regular,
full-time employment
Current scenario 22.6 trillion yen 5.9 trillion yen 81,000
Improved scenario 25.5 trillion yen 7.0 trillion yen 90,000
Difference 2.9 trillion yen 1.1 trillion yen 9,000
Summary chart of The Nippon Foundations findings. This shows that under the
improved scenario, lifetime earnings increase 2.9 trillion yen, the net tax and social
security burden increases 1.1 trillion, and the number of regular, full-time
employees increases by 9,000 relative to the current scenario.
These results clearly show that child poverty is a problem that has a huge impact on
the Japanese economy and everyone in Japan, and also suggest that the
implementation of measures to address the problem can be expected to yield a very
large return.

In addition to compiling the latest research from Japan and overseas, the report
outlines how the estimates were made and provides more detailed results, and also
considers suggestions for society and government policy.
As a follow-up, a second report breaking down the economic loss to society by
prefecture is being released.

Original report on research results (December 2015, Japanese only)

Report breaking down economic loss by prefecture (March 2016, Japanese only)