Empirical Analysis of Fertility Rates - Focus on its relationship with the state of economic activity and family policy

Fertility in Japan is declining rapidly, with the total fertility rate falling to 1.25 in 2005. What connection does this decline in fertility have on the economy, and to what extent does government policy have the effect of stemming the decline? In this paper I examine economic indicators such as household income and the supply-demand situation in the labor market, and family policy relating to declining fertility, for example the extent of the impact of the amount of child allowances and of increasing the number personnel at daycare centers. As a result of analyses using data from individual prefectures for the period from 1985-2004, I found that an improvement in the employment environment has the effect of raising the fertility rate, through it has to be said that that impact is only slight. In addition, I observed almost no impact at all made by family policy to address declining fertility. These findings differ from those of previous research, and suggest that although family policy can be effective with regard to specific households, the effect may not show itself at the macro level.