Effect of Child Care Leave Law on the Work Continuation and Fertility Timing of Mothers in Japan Using Natural Experiment

Nobuko Nagase, Ochanomizu University and Cornell University

The paper analysis the effects of introduction of short hour working option after return from parental leave on fertility and work continuation at prebirth employer. Identification is based on Japanese reform mandating firm to give short hour option till child is under three for firms with 101 employees which was extended to smaller firms two years later. Using a national panel survey of 2002 to 2010 with 14150 females in 20 to 34 at the start year, we found significant increase in fertility, especially among highly educated females. Lack of work flexibility may be one of the factor that stagnated female continued work despite the introduction of child care leave as early as 1992 and the enhancement that followed. While the reform promoted work continuation of mothers with higher education, on the other hand, fertility of high school graduate stagnated since the less educated has less access to such entitlement.