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Economic Determinants of Japan's Low Fertility Rate: Cointegration Analysis

From: Population Review
Volume 50, Number 2, 2011



This paper discusses the determinants of Japan's declining fertility rate from 1973 to 2008. We examine various economic factors: GDP per capita, infant mortality rates, female labour participation, cost of education, and urbanization and find that these variables are cointegrated. We discover that GDP per capita has a negative relationship with fertility rates and a 1% increase in GDP per capita leads to a decrease in fertility by 2.1%. In addition, we discover that female labour participation shows an unexpected positive relationship to fertility suggesting that their financial contribution to the family has lowered the cost of child rearing.

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