One of my former students sent me this CNN piece about Japanese corporations incentivizing fertility by making their employees go home early from work two days a week. I have a few comments and questions about this article that I'll put in writing below, and a lot more that I will leave to imagination.
1) The biggest reason why countries care about declining fertility rates is because of the increased burden of social insurance programs for the old on the declining population of young. This is a real problem in Japan as their population is aging (the article claims) "at a faster pace than any other country in the world." In contrast, a decreasing population actually increases per-capita GDP in the short run.
2) Why do corporations care about increasing the fertility of their employees? This is a longer-term problem than most boards of directors care about. Further, one could argue that fertility decreases the productivity of both male and female workers in the first year of parenthood. I am not familiar with this vein of the labor economics literature, but I'll bet there is some research showing that workers who are married with children are more productive. But this is a conditional argument, and the choices to get married and have children are extremely endogenous. This brings me to my next question.
3) How effective will this policy be? How many marginal parents are going to jump off the fence if their work sends them home at 5:30 pm two days a week? The fertility decision is a major long-term commitment in terms of both time and resources. If the Japanese government wanted to increase the population growth rate, a policy with a longer-term horizon might be more effective (e.g., some permanent tax cut or subsidy).
In summary, declining fertility rates in many countries like Japan and across Europe do pose problems. But these declining rates are likely caused by deeper individual preference-level characteristics and changes. These governments should ask themselves whether they really want to be inducing current marginal parent-aged individuals into having babies and, if so, what might be the most effective means. I am skeptical that corporate "early-out" days are the answer.
2) Why do corporations care about increasing the fertility of their employees? This is a longer-term problem than most boards of directors care about. Further, one could argue that fertility decreases the productivity of both male and female workers in the first year of parenthood. I am not familiar with this vein of the labor economics literature, but I'll bet there is some research showing that workers who are married with children are more productive. But this is a conditional argument, and the choices to get married and have children are extremely endogenous. This brings me to my next question.
3) How effective will this policy be? How many marginal parents are going to jump off the fence if their work sends them home at 5:30 pm two days a week? The fertility decision is a major long-term commitment in terms of both time and resources. If the Japanese government wanted to increase the population growth rate, a policy with a longer-term horizon might be more effective (e.g., some permanent tax cut or subsidy).
In summary, declining fertility rates in many countries like Japan and across Europe do pose problems. But these declining rates are likely caused by deeper individual preference-level characteristics and changes. These governments should ask themselves whether they really want to be inducing current marginal parent-aged individuals into having babies and, if so, what might be the most effective means. I am skeptical that corporate "early-out" days are the answer.
