Balancing family and career: The effect of public childcare on fertility in Japan

In this study, we examine the impact of public childcare provision on fertility in Japan between 1990 and 2020. Using micro data from Vital Statistics and the Population Census, we reveal the heterogeneous effects of increasing childcare slots on birth rate by mothers' age and birth parity. Our analysis shows that a 100% increase in the capacity of childcare centers increases the birth rate by 0.14 points. First births account for 53% of this effect, second births for 41%, and third births for the remaining 6%. The effect of having a first child was particularly large among women in their late 20s to early 30s, while the effect of having a second child was notable among women in their late 20s and late 30s. The effect of having a third child was limited to women in their early 30s, suggesting that it was particularly large for those who had their first and second children at a relatively younger age. Additionally, our analysis shows that the policy effect is larger for university graduates than for non-graduates, suggesting that public childcare alleviates challenges in balancing work and family responsibilities among career-oriented women.