School Entry Cutoff Date and the Timing of Births

Using birth records in Japan, where school entry rule is strictly enforced, this paper shows that more than 1,800 births a year are shifted from one week before the school entry cutoff date to one week following the cutoff date. Because older children perform better academically than their younger peers, parents who value potential long-term academic gains over the short-term gain of childcare cost savings do exploit birth timing as a means of early childhood investment. Heterogeneous responses by parents violate the assumption of regression discontinuity design that births around the school entry cutoff dates are random.