Interdependencies between women's employment, coresidence with parents and childbirth in post-war Japan

Setsuya Fukuda, Max Planck Institute for Demographic Research

In Japan, availability of a grandmother for childcare is thought to increase a couple's fertility. Studies also suggest that wife's employment decrease fertility. However, past estimates of the effects of intergenerational coresidence and female employment on fertility have been estimated without taking into account the interdependence of these processes. For example, it is likely that couples who want many children tend to coreside with grandmothers and that women who plan to have a child may stop employment. Omitting such effects leads to potentially large overestimates of the effects. In this paper, I apply simultaneous hazard models that include endogeneity in the form of unobserved heterogeneity to a nationally representative sample in 2001 in Japan. I expect effects of coresidence and female employment to be much smaller once selection and reversed causation are taken into account.