Does the expectation of having to look after parents in the future affect fertility?

This paper argues that the expectation of future care for aging parents may be a major factor contributing to the current low fertility rate in Japan. Using data from the 1998 and 2008 National Family Research of Japan (NFRJ) surveys and a Poisson-logit hurdle model, this paper examines whether the expectation of having to look after parents in the future affects a couple’s current fertility. No study has examined the effects of future burden of aging parents on fertility. In this paper, an estimate of the probability that a couple will look after their parents is estimated from a model using past data on the characteristics of the couple at the time of their marriage. We then use a Poisson-logit hurdle model to examine the effects of the probability of looking after a parent on a couple's current fertility. The first stage model is a logit model which examines the decision of whether or not to have any children, and then in the second stage a Poisson model is applied to explain the number of children a couple has conditional on the couple having at least one child. The empirical evidence presented suggests that there are strong generational effects, and that for the post-war cohort, the probability of having to look after a parent increases the probability of couples being childless. On the other hand, the older generation reacts in the opposite direction by increasing their family size. As a robustness, a logit analysis which indicates similar results is also undertaken. Especially, for the post war generation, the probability of having to look after a parent increases the probability of couples being childless and reduces the probability of having third child.