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The Impact of Long-Term Economic Recession to Birthrate Decline from the Perspective of Employment Status Among Men

February 27, 2007

Overview

Main reason that the birthrate in Japan has fallen is a fall in the marriage rate. Indeed, although the number of births per capita among married women has not changed significantly, the marriage rate among women has fallen sharply. Accordingly, one of the key points of any analysis of the problem of birthrate decline must be an exploration of the reasons for the fall in the marriage rate among women. This report examines "economic factors" as a cause for the decline in the marriage rate.

If employment status (whether one has a job or not) is taken as an indicator of economic sentiment among individuals, and the relationship between employment status and marriage rate is examined, a clear difference will be seen between men and women: the impact of employment status on marriage rate among women is uncertain, whereas the marriage rate is high among men in employment but low among those who are unemployed. From this fact, it may be deduced that employment status has a significant impact on the decision whether or not to marry among men. The deterioration in employment conditions due to the economic recession that followed the collapse of the bubble economy caused the employment rate among men to fall, and this in turn caused the marriage rate and birthrate to decline.

Assuming certain conditions, an estimate of the negative impact on the birthrate exerted by the deterioration in employment conditions since 1990 suggests that, as of 2005, the birthrate has been depressed by approximately 100,000 births in terms of births per annum, or by 0.12 points in terms of the total fertility rate. The main reason is that the decline in the employment rate among men was particularly sharp among those aged 20-30, so that the marriage rate among women of the same age band also fell. If employment conditions had not deteriorated, it is highly likely that the pace of decline in the birthrate would have been gentler.

Accordingly, policies aimed at boosting the employment rate are effective not only as economic measures, but also as measures against birthrate decline. In particular, an expansion of measures to boost the demand for labor is essential. Given that employment rates are still lower than their previous peak level, especially in the younger age groups, it is important that, for the time being, the government pursue monetary and fiscal policies geared to achieving a rate of economic growth in excess of the potential growth rate.

For more information on the content of this report, please contact Hideki Matsumura, the Japan Research Institute, Limited.

Tel: 03-3288-4524
E-mail:matsumura.hideki@jri.co.jp

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