Improving Japan’s Special Adoption System: A Market Design Perspective

Nanami Aoi, Kenzo Imamura, Hiroaki Odahara, Ayana Kono, Keisuke Horikoshi, Saeko Maeda

This study provides a set of recommendations for improving the system used for a form of child adoption in Japan known as Tokubetsu Yōshi Engumi, or special adoption, from the perspective of market design and matching theory. The key institutional issues involved in special adoption in Japan include its decentralized market structure, under which the many regional public agencies (child guidance offices) and private adoption mediation agencies operate separately. In addition, the matching decisions of these entities rely heavily on the skills and knowledge accumulated by individual practitioners through experience.

This proposal provides three interconnected approaches for institutional improvement: (1) establish a centralized institution, in particular to centralize information on prospective adoptive parents and children; (2) increase market thickness by integrating existing fragmented markets and expanding market participation; (3) introduce a recommender system to support matching decisions.

In practice, it is important for institutional reforms to take into account the existing system. To minimize institutional changes and maximize the impact of these three approaches, we propose the following concrete reform process. First, we propose establishing a centrally coordinated information-sharing system based on child guidance offices in regions where the barriers to coordination are relatively low. Next, we propose a framework under which private adoption mediation agencies can voluntarily participate in this system. The proposal is aimed at establishing a hybrid market structure that combines centralization and decentralization. Through this, the proposal seeks to both encourage greater participation by prospective adoptive parents and children and introduce a recommender system.

Contact info

The University of Tokyo Market Design Center（UTMD）
Graduate School of Economics, the University of Tokyo
E-mail: market-design[at]e.u-tokyo.ac.jp
Phone: (+81)3-5841-3441