Subtle fertility recovery in cohorts who entered the labour market during the deep recession in Japan

Despite the popular belief that the deterioration of youth employment prospects accelerated fertility decline in Japan, women born in the late 1970s and early 1980s who entered the labour market during the worst job market ‘ice-age’ have slightly more children than older cohorts. After demonstrating this fact, this study discusses the potential reasons for this subtle fertility recovery. I consider two potential mechanisms. First, the lower potential earnings of women increase fertility through lowering the opportunity cost of parenthood. Second, the simultaneous improvement in public support and work environment has enabled more women to continue working after childbirth. Women who had a regular job before childbearing benefit more from these changes. I show that the subtle increase in fertility was driven by college-educated women, providing suggestive evidence for the second explanation.