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Economic factors in the declining birth rate

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Chapter Summary

This chapter explains the fertility decline mainly in terms of economic factors, for example, the increasing costs of childrearing. The costs for child care include not only pecuniary expenses for childrearing, but also the opportunity costs of women who have to leave full-time work to take care of their children and have to sacrifice substantial lifetime earnings which they would otherwise receive. Although the government has tried to expand the pubic supply of nursery schools, there is still not enough supply to meet the increasing demand from working women in the urban areas. The main reason for the lack of public child-care services is high costs due to public employees' seniority-based wages, which are subject to public budget constraints. The long working hours by international standards in Japanese companies function as a sort of employment protection, because companies can reduce labour costs during recessions by merely cutting overtime hours.

Keywords: child-care services; fertility decline; Japanese companies; labour costs



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