This paper describes how fertility is determined in a model that assumes the existence of child-care services. When child-care services exist, two multiple states result: a state that brings about low fertility with low female labor partici-pation, and a state that brings about high fertility with high female labor participation. This result is consistent with the positive correlation that is found between the total fertility rate and female labor participation in developed countries, as described by Ahn and Mira (2002) [1] and others. Moreover, this paper presents analyses of the effects of child-care policies, for example, a child allowance and a subsidy for child-care services policies. These policies instantaneously raise fertility. However, in a dynamic general equilibrium model, these policies might pull down fertility because capital accumulation decreases in the long run. If income growth continues in the long run, then the child allowance can always pull up fertility. However, if the income level converges to constant level in the long run, then the child allowance might pull down fertility. This result shows that the effect of the child allowance depends on whether income growth ceases or continues in the long run.
N. Ahn and P. Mira, “A Note on the Changing Relationship between Fertility and Female Employment Rates in Developed Countries,” Journal of Population Economics, Vol. 15, 2002, pp. 667-682. doi:10.1007/s001480100078
J. E. Sleebos, “Low Fertility Rates in OECD Countries: Facts and Policy Responses,” OECD Social, Employment and Migration Working Papers, Vol. 15, 2003. http://www.oecd.org/dataoecd/13/38/16587241.pdf
K. Yamaguchi, “On the Genuine Relationships between Female Labor Participation and Fertility: Investigations of OECD Countries (in Japanese),” RIETI Discussion Paper Series, 05-J-036, 2005. http://www.rieti.go.jp/jp/publications/dp/05j036.pdf
T. K?gel, “Did the Association between Fertility and Female Em-ployment within OECD Countries Really Change in Sign?” Journal of Population Economics, Vol. 17, 2004, pp. 45-65. doi:10.1007/s00148-003-0180-z
H. Engelhardt and A. Prskawetz, “On the Changing Correlation between Fertility and Female Employment over Space and Time,” European Journal of Population, Vol. 20, 2004, pp. 35-62. doi:10.1023/B:EUJP.0000014543.95571.3b
O. Galor and D. Weil, “The Gender Gap, Fertility, and Growth,” American Economic Review, Vol. 86, No. 3, 1996, pp. 374-387. http://www.jstor.org/stable/2118202
P. Apps and R. Rees, “Fertility, Taxation and Family Policy,” Scandinavian Journal of Economics, Vol. 106, No. 4, 2004, pp. 745-763. doi:10.1111/j.0347-0520.2004.00386
M. Hirazawa and A. Yakita, “Fertility, Child Care outside the Home, and Pay-As-You-Go Social Security,” Journal of Population Eco-nomics, Vol. 22, No. 3, 2009, pp. 565- 583. doi:10.1007/s00148-007-0153-8
D. F. Martínez and A. Iza, “Skill Premium Effects on Fertility and Female Labor Force Supply,” Journal of Population Economics, Vol. 17, 2004, pp. 1-16. doi:10.1007/s00148-003-0150-5
M. Yasuoka, “A Rela-tionship between Fertility and In- come (in Japanese),” The Society for Economic Studies, The University of Kitakyushu Working Paper Series, No. 2008-4, 2008. http://www.kitakyu-u.ac.jp/economy_new/research/files/yasuoka2008_2.pdf
M. Momota, “The Gender Gap, Fertility, Subsidies and Growth,” Economics Letters, Vol. 69, 2000, pp. 401-405. doi:10.1016/S0165-1765(00)00304-9
M. Yasuoka, “A Study of Childcare Support Policy in the Model Based on En-dogenous Introduced the Childcare Goods Provided Publicly (in Japanese),” Quarterly of So- cial Security Research, Vol. 43, No. 3, 2007, pp. 261-274. http://www.ipss.go.jp/syoushika/bunken/data/pdf/18624408.pdf
L. W. Aarssen, “Why Is Fertility Lower in Wealthier Countries? The Role of Relaxed Fertility-Selection,” Po- pulation and Development Review, Vol. 31, No. 1, 2005, pp. 113-126. http://www.jstor.org/stable/i278908 doi:10.1111/j.1728-4457.2005.00054.x
G. S. Becker, “An Economic Analysis of Fertility,” In: A. Coale, Ed., Demographic and Economic Change in De- veloped Countries, Princeton University Press, Princeton, 1960.
G. S. Becker, K. M. Murphy and R. Tamura, “Human Capital, Fertility, and Economic Growth,” Journal of Po- litical Economy, Vol. 98, No. 5, 1990, pp. S12-S37. http://www.jstor.org/stable/2937630 doi:10.1086/261723
D. de la Croix and M. Doepke, “In-equality and Growth: Why Differential Fertility Matters?” American Economic Review, Vol. 93, No. 4, 2003, pp. 1091-1113. http://www.jstor.org/stable/3132280 doi:10.1257/000282803769206214
M. Kimura and D. Yasui, “Public Provision of Private Child Goods,” Journal of Public Economics, Vol. 93, 2009, pp. 741-751. doi:10.1016/j.jpubeco.2009.02.002
T. Oshio, “Child-Care Reform in Pension System and the Fertility Rate (in Japanese),” Quarterly of Social Security Research, Vol. 36, No. 4, 2001, pp. 535-546. http://www.ipss.go.jp/syoushika/bunken/data/pdf/15158107.pdf
B. van Groezen, T. Leers and L. Meijdam, “Social Secu- rity and Endogenous Fertility: Pensions and Child Allow- ance as Siamese Twins,” Journal of Public Economics, Vol. 87, 2003, pp. 233-251. doi:10.1016/S0047-2727(01)00134-7
B. van Groezen and L. Meijdam, “Growing Old and Stay- ing Young: Population Policy in an Ageing Closed Eco- nomy,” Journal of Population Economics, Vol. 21, No. 3, 2008, pp. 573-588. doi:10.1007/s00148-006-0067-x
L. Fanti and L. Gori, “Population and Neoclassical Eco- nomic Growth: A New Child Policy Perspective,” Eco- nomics Letters, Vol. 104, 2009, pp. 27-30. doi:10.1016/j.econlet.2009.03.014
P. McDonald, “Low Fertility and the State: The Efficacy of Policy,” Population and Development Review, Vol. 32, No. 3, 2006, pp. 485-510. http://www.jstor.org/stable/i20058896 doi:10.1111/j.1728-4457.2006.00134.x
W. Lutz, “Will Europe Be Short of Children?” Family Observer, European Observatory on Family Matters, European Commission, 1999, pp. 8-16.
K. Milligan, “Quebec’s Baby Bonus: Can Public Policy Raise Fertility?” Backgrounder, C.D. Home Institute, Toronto, 2002.
G. Laroque and B. Salanie, “Does Fertility Respond to Financial Incentives?” CEPR Discussion Paper Series, No. 5007, Center for Economic Policy Research, London, 2005.
J. Zhang, “Fertility, Growth and Public Investments in Children,” Canadian Journal of Economics, Vol. 30, No. 4a, 1997, pp. 835-843. http://www.jstor.org/stable/i301038 doi:10.2307/136272
B. van Praag and M. Warnaar, “The Cost of Children and the Use of Demographic Variables in Consumer De- mand,” In: M. Rosenzweig and O. Stark, Eds., Handbook of Population and Family Economics, Elsevier Science, Amsterdam, 1997. doi:10.1016/S1574-003X(97)80023-2
Z. Eckstein and K. I. Wolpin, “Endogenous Fertility and Optimal Population Size,” Journal of Public Economics, Vol. 27, 1985, pp. 93-106. doi:10.1016/0047-2727(85)90030-1
B. U. Wigger, “Pay-As-You-Go Financed Public Pen- sions in a Model of Endogenous Growth and Fertility,” Journal of Population Economics, Vol. 12, No. 4, 1999, pp. 625-640. doi:10.1007/s001480050117
P. M. Romer, “Increasing Returns and Long Run Growth,” Journal of Political Economy, Vol. 94, No. 5, 1986, pp. 1002-1037. http://www.jstor.org/stable/1833190 doi:10.1086/261420
E. Grossman and N. Yanagawa, “Asset Bubbles and En- dogenous Growth,” Journal of Monetary Economics, Vol. 31, No. 1, 1993, pp. 3-19. doi:10.1016/0304-3932(93)90014-7
M. Yasuoka and A. Miyake, “Change in the Transition of the Fertility Rate,” Eco-nomics Letters, Vol. 106, No. 2, 2010, pp. 78-80. doi:10.1016/j.econlet.2009.10.005
G. S. Becker and R. J. Barro, “A Reformulation of the Economic Theory of Fertility,” Quarterly Journal of Eco- nomics, Vol. 103, No. 1, 1988, pp. 1-25. doi:10.2307/1882640
R. J. Barro and G. S. Becker, “Fer-tility Choice in a Model of Economic Growth,” Econometrica, Vol. 57, No. 2, 1989, pp. 481-501. http://www.jstor.org/stable/i332736 doi:10.2307/1912563
P. Wang, C. K. Yip and C. A. Sco-tese, “Fertility Choice and Economic Growth: Theory and Evi-dence,” Review of Economics and Statistics, Vol. 76, No. 2, 1994, pp. 255-266. http://www.jstor.org/stable/i336980 doi:10.2307/2109880
M. Lundholm and H. Ohlsson, “Wages, Taxes and Pub- licly Provided Day Care,” Journal of Population Eco- nomics, Vol. 11, 1998, pp. 185-204. doi:10.1007/s001480050064