Mitigating Fertility Decline in Japan: Roles of Husband, Workplace, Government, and Community

Fellow, RIETI

Fertility rate among the Japanese female population is declining to such an extent that with the current trend, Japan's population is predicted to decline to 40 million in 2100: one-third of the current figure. Fertility rate is not only dependent on women's marital behavior, which demographers consider as the major cause of Japan's fertility decline, but is also strongly affected by family, workplace, and the other aspects of social environment surrounding married women in Japan. Using data from the 1993-1999 Panel Survey of Consumer's Life (PSCL) collected by Japan's Institute for Research on Household Economics, I analyzed factors affecting married women's fertility rate and their desire to have children.

"Desire to have children" is the most important determinant of fertility rate

The PSCL data supports the hypothesis that married women are the primary decision-makers concerning childbirth in contemporary Japan. In 1994 the PSCL collected data on married women's desire about having another child. Analysis of this data shows that among married women with two children or less, 67% of those who "definitely want another child", 40% of those who "want another child depending on conditions," and only 7% of those who "did not want another child" bore another child within the next five years. Regression analysis also shows that the desire to have another child is the strongest factor affecting the subsequent rate of childbirth. Hence, "desire to have children" is the most critical factor affecting fertility rate.

Husband's roles: Wife's perception of family experiences

A factor that is expected to influence the wife's desire to have children is the agreement between husband and wife on the division of household labor. There are two ideal types of agreement: the traditional agreement in which the husband is responsible for the family income while the wife devotes herself to housework and child rearing, and the nontraditional agreement in which the spouses are responsible with certain parity for both financial and household duties. The decrease in fertility rate can be partly attributed to the collapse of the traditional agreement. The system where the wife is solely responsible for household duties has become difficult to sustain due to the increased opportunity costs that child rearing and household chores impose on married women, and the resulting change in their perception of family values, as well as an increase in the divorce rate. The recent increase in uncertainty concerning stability of the husband's employment also seems to an influential factor.

When the foundation of the traditional agreement is undermined, the establishment of a nontraditional agreement is expected to be an important determinant affecting married women's desire to have children. However, the PSCL data suggest that this expectation does not hold for Japanese women, showing no correlation between married women's desire to have another child and the husband's share of household choirs and child care. This seems to reflect a generally low expectation on the wife's part of the husband's share in these family roles. According to wives, 45% of husbands did not share any of such household shores as cooking, washing, and cleaning, and 87% of the husbands have less than 10% share of these household chores. Furthermore, the husband's participation in household duties does not vary with the employment status of the wife.

Instead, the wife's perception of family experiences and interactions with the husband has a significant effect on her desire to have children. The PSCL asked married women how often they talk with their husbands about "concerns and pleasant experiences." This response to this question - "often", "sometimes", "rarely or never" - has a large effect on the wife's desire to have another child, and this indirectly affects the subsequent rate of childbirth.

Roles of workplace: Expansion of "family-friendly" environments

It is argued that the increase in the women's participation in the labor force has accelerated the decline in fertility rate, but this proposition remains groundless. While a strong negative correlation exists between the employment of married women and the number of children, this merely reflects that fertility decline promotes employment and reemployment of married women, since childbirth increases the rate of married women's leaving the labor force, and having fewer childbirths also accelerates their reentry into the labor force.

When considering the effects of married women's employment status on fertility, it is crucial to take into account whether the workplace provides a "family-friendly environment." In particular, my analysis of the PSCL data indicates that an availability of maternity leave from employment generates a significant increase in married women's fertility rate and their desire to have children. When other determinants of fertility rate are controlled, the fertility rate among women who either know that their workplace provides no maternity leave or do not know whether their workplace provides a maternity leave is the lowest, followed by nonemployed women, whereas the highest fertility rate is observed among women whose know that their workplace does provide a maternity leave. This finding indicates that the fertility rate will rise if workplaces implement maternity leave and other family-friendly systems. Whether maternity leave is available for married women, or whether they know whether their workplace provides maternity leave, depends greatly on firm size and employment status. In order to raise fertility rate among married employed women, it is especially important for maternity leave to be made available to the employees of small and medium-sized firms and nonregular workers (hi-seishain).

Role of the government: Lowering the "quality cost" of children

As a national income per capita rises, fertility rate declines. This is paradoxical given that children are regarded as assets from an economics standpoint. In Becker's theory of the family, the likelihood of having another child is subject not only to an income effect but also to a price effect, which represents the "quality cost of a child," or more concretely, the expenditure per child by the parents such as educational, living, childcare/healthcare expenses, and the opportunity cost of parents on spending time on child rearing. A rise in income is likely to lead to an increase in the price effect because of parents' wish to raise their children with greater expenses for their "quality" when more income is available. Accordingly, a gain in household income may increase the probability of having a first child since the income effect likely exceeds the price effect, but may reduce the likelihood of having three or more children since the price effect then likely exceeds the income effect. The PSCL data show that an increase in the husband's income results in an increase in the rate of the wife bearing a first child, but has no effect on the rates of second and third childbirths. Analysis also shows that an increase in the husband's income results in a decrease of the wife's desire to bear a third child, while having on effect on the wife's desire to bear a first or second child. Becker's theory is thus consistent with empirical findings for the cases where significant income effects are observed. This suggests that the fertility rate can be increased through governmental efforts to reduce the quality cost of child rearing through income tax exemptions and compensations for parents' expenses for children.

Role of community: Support and diffusion of the joy of child rearing

Bearing and rearing a child can be considered as a societal act, and thus affected not only by the value of the individual directly involved but also by values of the other people in the community. Increasing number of researchers in the U.S. believe that childbirth is a societal diffusion process like fashion trends. The decision to have childbirth is influenced not only by family and work environments, but is also by how supportive the community is towards the act of child rearing. In order to mitigate fertility decline, it is important for family, workplace, and community to act together to produce a society in which bearing and rearing a child is a truly rewarding and joyful experience that more than offsets the associated burdens. It will be an effective measure to help increase the fertility rate if the society succeeds in making child rearing a joyful experience for couples, and where the positive attitude toward raising children in the society is disseminated by experienced parents to couples still considering the option.

September 14, 2004

September 14, 2004