Why the Stork bypasses Japan: Fertility Rebound, Gender Wages and Growth

Abstract

Fertility and per capita income are positively associated across most high income OECD countries. Low fertility and a gender wage gap persist in Japan. This paper presents a model where endogenous increases in the price of child care and gender equity in the allocation of capital play important roles in the e�ect of per capita income growth and rising female relative wages on fertility. Results indicate that a positive relation between fertility and per capita income is not robust; overall fertility rises with female relative wages if child care productivity is su� ciently high; female relative wages may not rise if men work with increasing capital relative to women.