Economic Uncertainty and Fertility: Insights from Japan

James Raymo, University of Wisconsin-Madison
Akihisa Shibata, Kyoto University

In this paper, we develop a model of fertility that incorporates economic uncertainty faced by both men and women. We evaluate this model using data from Japan, a country characterized by a prolonged recession and substantial differences in the economic opportunities and economic roles of men and women. Results of aggregate level analyses for the period 1985-2010 indicate that men’s economic uncertainty (but not women’s) is associated with fertility and that the observed decline in TFR would have been less pronounced if indicators of economic uncertainty had remained at their 1985 (pre-recession) levels. Results of individual-level analyses between 2004-2010 are different, with no evidence that husbands’ economic uncertainty is associated with the likelihood having a child in a given year and some evidence that higher economic uncertainty for wives is associated with a lower risk of childbearing. Subsequent analyses will incorporate marriage and seek to understand these inconsistent findings.