Structural Changes in the Patterns of Japanese Fertility

The Japanese lower fertility rate has decreased alarmingly since 1970s. We apply the Butz-Ward model to Japanese prefecture-level data for 1965-2015 to investigate changing determinants of the declining fertility, with focus on the role of husband's income and wife's wages. We extend the Butz-Ward model by adding a variable for female marriage rate to avoid omitted variable bias and by conducting the subsample analysis, separately for subperiods, I(1965-1975) and II(1980-2015) to capture the structural change, suggested by a Chow test: the structural change might have taken place due to the rapid development of the industrial sector corresponding increase in husband's income and wife's wages as well as the rise in female marriage rate with gradual decrease in fertility rate in the mid-1970s. The estimation results show that the Butz-Ward model explains subperiod I(1965-1975) well. In contrast, the estimation results for subperiod II(1980-2015) are not consistent with the Butz-Ward model. In addition, the coefficient for female marriage rate is positive and statistically significant for all periods.