Long-term effects of labor market conditions on family formation for Japanese youth

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. This study aims to examine how each cohort's family formation is affected by labor market conditions experienced in youth in Japan. Although deterioration in youth employment opportunities has often been blamed for Japan's declining marriage and fertility rates, the effects of slack labor market conditions on marriage and fertility are theoretically unclear. We estimate the effects of regional labor market conditions on marriage and fertility, controlling for nation-wide year effects and prefecture fixed effects, and find the following. First, the male unemployment rate is negatively correlated with marriage of women in the local labor market, although the correlation is weak and concentrated on the less educated group. Second, high school-educated women who experienced a recession while entering the labor market are less likely to have children and tend to marry later. In contrast, a recession at entry to the labor market rather increases fertility among college-educated women. The overall impact of labor market conditions experienced in youth on family formation is relatively weak, compared to the substantial losses in earnings and employment stability documented by the existing studies. Terms of use: Documents in

The Long-Term Effects of Labor Market Entry in a Recession: Evidence from the Asian Financial Crisis

“…The earlier marriages and higher fertility we find among female recession graduates are also observed in the United States (Maclean et al, 2016;Schwandt and von Wachter, 2020) and Japan ( Hashimoto and Kondo, 2012; Raymo and Shibata, 2017). In these studies, as well as in ours, common cultural and institutional features may strengthen the positive substitution effect of reduced labor market opportunities on family formation behaviors among women.…”

“…Well-known studies include Genda et al (2010), Kahn (2010), Hershbein (2012), Altonji et al (2016), and Schwandt and von Wachter (2019) for the United States, Oreopoulos et al (2012) for Canada, Genda et al (2010) for Japan, Brunner and Kuhn (2014) for Austria, Cockx and Ghirelli (2016) for Flanders, van den Berge (2018) for the Netherlands, Raaum and Røed (2006) for Norway, and Fernández- Kranz and Rodríguez-Planas (2018) for Spain. effect (Hashimoto and Kondo, 2012;Hershbein, 2012;Kondo, 2012; Currie and Schwandt, 2014;Hofmann and Hohmeyer, 2016;Maclean et al, 2016; Schwandt and von Wachter, 2020). Our study contributes to the literature by showing that reduced labor market opportunities early in one's career can lead to a permanent change in marriage probability and fertility, especially in the case of a large-scale recession.…”

The effects of recessions on family formation

“…Despite the observed heterogeneity across countries and cohorts for less-educated women or women in general, the effect of a recession at graduation on marriage and fertility for college-educated women tends to be positive in Japan, the US, and Germany [11], [12], [13]. This implies that the income effect is weaker for college-educated women and/or the substitution effect works more strongly for them.…”

“…Second, and a more fundamental reason, is that education and fertility may be determined simultaneously and both can be affected by business-cycle conditions. Nonetheless, a few studies take the current education level as a given and examine how the effect of a recession on fertility and marriage differs across groups with different levels of education [5], [10], [11]. The results suggest that women with different educational backgrounds respond to business-cycle conditions differently, but the direction seems to vary across countries, race, and cohorts.…”

“…In Japan, a recession experienced at youth has a negative effect on fertility for high-school educated women, but the effect is opposite for college-educated women [11]. A study of German college graduates shows that a recession at graduation has a temporarily positive effect on fertility timing of women, but no effect on completed fertility [13].…”