A Model Simulation of Birth Taking into Account the Birth of a Second Child or More

Abstract

The purpose of this study is to simulate the TFR(Total Fertility Rate) of Japan in the future by making simultaneous equation models consisting of a lot of variables, and analyzing the degree of effects of these variables on the TFR. The prominent point in this study, in comparison with some studies which are still performed now, is to take into account the births of a second child or more, and to use the ratio of female workers who engage in part-time work as a variable taking into account the effect of the increase of female "freeters" on lagging their marriageable ages, which is a current problem. I used an OLS to form an estimation and did a deterministic simulation. As a result of estimation about the coefficient and the significant level of female wages reflecting an opportunity cost, the birth of a second child or more was stronger than the birth of a first child, and correlations between the ratio of female workers who engage in part-time work and the ratio of females experiencing first marriage were negative. The period used in simulation was from 2004 to 2019 and six scenarios were prepared. In 2019 the highest case of TFR was 1.34 and the lowest case 0.82. The former is the case where the capacity of day nurseries would have to increase the annual rate to 2 percent and economic growth to 1 percent, and the latter is the case where the capacity of day nurseries would be constant from 2003 and economic growth would increase at an annual rate of 2 percent. In this study it was shown that improvement of the economic environment has a negative effect to decrease births through the increase of female wages and a positive effect to increase births through a fall in the ratio of female workers who engage in part-time work and a rise in the ratio of female first marriages, the former was stronger than the latter. However this result shows that negative correlations between female wages and births may weaken to some extent and the positive effect of improvement of the economic environment may become strong if it is possible to increase child care support as an increase in the capacity of day nurseries to decrease an opportunity cost by policy.