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Estimating the Effects of Pronatal Policies on Residential Choice and Fertility

  • Ryo Nakajima

    (Yokohama National University)

  • Ryuichi Tanaka

    (National Graduate Institute for Policy Studies)

In this paper, we estimate the impacts of local-government-sponsored pronatal policies on fertility by exploiting information on the geographical variation in policies across municipalities in Japan. We develop an empirical model that accommodates both the location and fertility choices of households to take into account their self-selected migration across municipalities. We estimate the structural parameters using cross-sectional microdata on Japanese households in metropolitan areas. The results suggest that self-selection may generate substantial upward bias in the estimated impacts of pronatal policies on fertility. We also find that, after controlling for self-selection bias, some types of noncash benefit pronatal policies significantly increase the probability of births occurring in metropolitan households, although the magnitudes differ significantly by revenue and birth parity.

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Paper provided by National Graduate Institute for Policy Studies in its series GRIPS Discussion Papers with number 12-06.

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Length: 31 pages
Date of creation: Jul 2012
Date of revision:
Handle: RePEc:ngi:dpaper:12-06
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