Women’s changing work arrangements, career paths, and marital fertility in Japan

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Highlights

  • Married women working full-time who took advantage of childcare leave earned much higher than their part-time counterparts.

  • However, the higher predicted hourly wage lowered the probability of having first two children.

  • Thus, the opportunity cost of having children is greater than the income effect for full time workers.

Abstract

By drawing upon birth history data gleaned from the 2007 and 2010 rounds of the National Survey on Work and Family (NSWF), we estimate the relationship between the married female worker’s use of the childcare leave scheme and her hourly wage, and then evaluate the impact of her predicted hourly wage upon her probability of proceeding from parity 0 to parity 1, as well as from parity 1 to parity 2. We find that married Japanese women working full-time, who took advantage of childcare leave, earned considerably higher hourly wages than their part-time counterparts. However, the higher predicted hourly wage lowered the probability of having first two children. This implies that the opportunity cost of having children is greater than the income effect for full time workers. In comparison with full-time workers, married women working part-time show much lower probabilities of having first two children.

Introduction

Starting from 1991, a number of programs and measures to boost fertility have been implemented by Japanese government. The implementation of pronatalist programs and measures for changing women’s work arrangements might have substantially increased the complexity and diversity of life courses and life transitions among Japanese married women of reproductive age. Depending on which cohort a married woman belongs to and what life cycle stage she is at when the government policy intervention is introduced into the labor market, the amount of economic benefits she can receive from the policy intervention can vary considerably. In view of these possible theoretical linkages, this paper tries to quantify the magnitude of the impact of the implementation of “the 2005 Next Generation Law” and subsequent pronatal policy changes on the diversification of Japanese married women’s earnings and career paths, as well as on fertility, with particular emphasis on the impact of the childcare leave scheme.

Dozens of studies examine the effects of childcare leave on women’s labor force participation and fertility, based mainly on the experiences of Western countries. Although methodology varies across the studies, they generally indicate that childcare leave is an effective tool for raising fertility (Averrett & Whittington, 2001; Büttner & Lutz, 1990; Hoem, Prskawetz, & Neyer, 2001; Lalive & Zweimüller, 2005; Ridao-Cano & McNown, 2005; Winegarden & Bracy, 1995). Evidence regarding the effect of childcare leave on women’s labor force participation is more mixed (Baum, 2003; Berger & Milligan, 2005; Klerman & Leibowitz, 1999; Lalive & Zweimüller, 2005; Schönberg & Ludsteck, 2007). Studies on Japan are very limited (Suruga & Zhang, 2003; Shigeno & Matsuura, 2003; Yamaguchi, 2005; Kawaguchi, 2007; Suzuki, 2006; Yoshida, 2006; Lee, Ogawa, & Matsukura, 2009). In fact, the lack of adequate data and the complexity of causal relationships between childcare leave, women’s labor force participation, job tenure, women’s wages, the opportunity cost of children, and fertility make it difficult to draw firm conclusions about the effect of childcare leave on fertility. Lee et al. (2009) is a notable exception as it shows how childcare leave has influenced fertility through its intermediate effects on women’s selection into the labor market, job tenure, wages, and the opportunity cost of children, by using a nationally representative micro data, the 2007 National Survey on Work and Family (NSWF). However, the 2007 NSWF covered a very small number of birth records for 2005 and 2006. As Japan’s childcare leave programs changed dramatically between 2005 and 2009 and the country’s total fertility rate (TFR) increased substantially since the implementation of the Next Generation Law, additional research is warranted to investigate the linkage between childcare leave and fertility after 2006.

A recent study (Shintani, 2015) stirred up a controversy regarding the effectiveness of the Japanese childcare leave program again. The study shows that the average number of children among female public servants who have been married for 15–20 years is 2.13, as opposed to 1.64 children among their counterparts in the private sector. The duration of childcare leave for married women working as public servants has been three years since the inception of the system in 1992, as opposed to one year for their counterparts in the private sector. Thus, the difference in the size of completed fertility between married women working in these two sectors can be attributed to the difference in the duration of childcare leave. If this is the case, Japan’s fertility level would rise to a considerable extent when the duration of childcare leave in the private sector were extended to three years, simultaneously with further enhancement of other pronatalist programs and measures. Indeed in 2017, the government extended the duration of childcare leave to two years for working parents who cannot place their children in daycare centers at the end of the first year of their childcare leave. This revision may prove to be one of the crucial steps toward achieving the desired TFR level of 1.8, set as a policy goal by the Prime Minister in 2015. However, there have been arguments against the linkage between the childcare leave program and the fertility. According to them, the difference in the fertility between female public servants and their counterparts in the private sector might not be directly associated with the difference in the length of childcare leave, as only the first year of the leave is paid even for public servants.

Is childcare leave really effective in raising Japan’s fertility level? In this paper, by using the 2007 and 2010 rounds of the NSWF, we investigate the impact of the implementation of the 2005 Next Generation Law on fertility. As the survey provides sufficient data on the use of childcare leave program and fertility after 2005, it is expected to shed a new light on the linkage between the program and fertility.

The structure of the paper is as follows. In the next section, in order to set up the ground for analysis that follows, we describe the evolution and utilization of Japanese childcare leave programs. Section 3 presents methodology and data and Section 4 reports the results. In the final section, the main findings are summarized together with some policy implications of the present study.

Section snippets

The evolution and utilization of the childcare leave program

Japanese government has implemented a number of programs to boost fertility since 1991, as shown in Table 1. It should be noted, however, that the scope of the policy interventions promoted in the 1990s was confined primarily to alleviating the burden of childrearing and working outside the home borne by mothers of reproductive age. To reverse the declining trend, the government expanded the scope of its fertility programs and measures to a substantial extent after the turn of the century. In

Methodology and data

We closely follow the model employed by Ogawa and Ermisch (1996) and Lee et al. (2009). The theory predicts that the childcare leave will lower the opportunity cost of children, which is the loss of earnings due to childbearing and childrearing. This opportunity cost is closely related with earnings that the woman would have received if she had worked in the labor market. However, these earnings are not directly observed for housewives and thus should be calculated from the wage model of

Descriptive analysis

Before we move into regression analysis, it would be useful to examine some data sets for descriptive analysis. According the survey by the Daiichi Life Insurance Company (Daiichi Life Research Institute, 2011), in 2005, more than 35 % of the large-scale or medium-sized firms expanded their childcare leave schemes beyond what was stipulated in the Childcare and Family Care Leave Act revised in 2004. The data generated by the same survey in 2010 showed that the percentage of firms that had

Discussion

In this paper, we have examined how the Japanese marital fertility has been affected by a host of government pronatalist policy interventions, particularly by the Next Generation Law. We have found that the effect of the predicted full-time wage upon the probability of having first and second children is negative. However, the benefits which female full-time workers in Japan have received from the childcare leave scheme and other related programs have been substantial and have significantly

Funding

This research has been supported by a project on Low Fertility, Labor Market, and Family: Factors, Outcomes, and Policy Implications, sponsored by the Korea Institute of Health and Social Affairs between 2016-2018, M3653-F5409.

Declaration of Competing Interest

The authors report no declarations of interest.

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