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Measuring cost of children using equivalence scale on Japanese panel data

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  • Masako Oyama

Abstract

In this study, the cost of child rearing is estimated in order to examine the hypothesis that the recent fertility decline in Japan has been caused by increases in the cost of child rearing. Although there are various ways to estimate the cost of children, the research uses an equivalence scale. The results of the traditional Rothbarth estimation showed that the cost of child raising in Japan is not very high. However, the results of the equivalence scale estimation using 'satisfaction for the income' as the utility measure showed that the cost of child raising is much higher than calculated in the Rothbarth model. The latter subjective scale approach is now said to have more advantages. Thus, the cost of child raising in Japan is much higher than was believed to be the case, and this could be one of the reasons for the decline in the fertility rate in Japan.

Suggested Citation

  • Masako Oyama, 2006. "Measuring cost of children using equivalence scale on Japanese panel data," Applied Economics Letters, Taylor & Francis Journals, vol. 13(7), pages 409-415.
  • Handle: RePEc:taf:apeclt:v:13:y:2006:i:7:p:409-415
    DOI: 10.1080/13504850500193042
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    References listed on IDEAS

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    1. Tsakloglou, Panos, 1991. "Estimation and Comparison of Two Simple Models of Equivalence Scales for the Cost of Children," Economic Journal, Royal Economic Society, vol. 101(405), pages 343-357, March.
    2. Deaton, Angus S & Muellbauer, John, 1986. "On Measuring Child Costs: With Applications to Poor Countries," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 720-744, August.
    3. Hyunbae Chun & Jeungil Oh, 2002. "An instrumental variable estimate of the effect of fertility on the labour force participation of married women," Applied Economics Letters, Taylor & Francis Journals, vol. 9(10), pages 631-634.
    4. David Sahn & Ari Gerstle, 2004. "Child allowances and allocative decisions in Romanian households," Applied Economics, Taylor & Francis Journals, vol. 36(14), pages 1513-1521.
    5. Charlier, Erwin, 2002. "Equivalence Scales in an Intertemporal Setting with an Application to the Former West Germany," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 48(1), pages 99-126, March.
    6. Deaton, Angus S & Ruiz-Castillo, Javier & Thomas, Duncan, 1989. "The Influence of Household Composition on Household Expenditure Patterns: Theory and Spanish Evidence," Journal of Political Economy, University of Chicago Press, vol. 97(1), pages 179-200, February.
    7. Melenberg, B. & van Soest, A.H.O., 1996. "Measuring the costs of children : Parametric and semiparametric estimators," Other publications TiSEM 1227b8b2-0575-4b5d-9bac-7, Tilburg University, School of Economics and Management.
    8. A. Chevalier & T. K. Viitanen, 2002. "The causality between female labour force participation and the availability of childcare," Applied Economics Letters, Taylor & Francis Journals, vol. 9(14), pages 915-918.
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    Cited by:

    1. repec:spr:jhappi:v:19:y:2018:i:1:d:10.1007_s10902-016-9799-9 is not listed on IDEAS
    2. HORI Masahiro, 2011. "The expenditure on children in Japan," ESRI Discussion paper series 279, Economic and Social Research Institute (ESRI).

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