Declining Fertility and Investment in Children: The Quantity and Quality Trade-off in Japan and East Asia

Naohiro Ogawa Nihon University

Population Research Institute

Shorenstein APARC Seminar, January 19, 2011

World Population World Population

billion9In 0 6.101 02 0 0,

2020thth Century: Century of Century: Century of Population ExplosionPopulation Explosion

↓

2121stst Century: Century of Century: Century of Population AgingPopulation Aging

Declining FertilityThe most important

demographic source of population aging at an

early stage

（ 10 thousand persons ）

Men Women

Number of births by sex in Japan, 1908-2008

0

50

100

150

200

250

300

1908 1918 1928 1938 1948 1958 1968 1978 1988 1998 2008

2008

Annual number of births in postwar Japan

0

50

100

150

200

250

300

1947 1952 1957 1962 1967 1972 1977 1982 1987 1992 1997 2002

Year

10,0

00 b

irths

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

1947 1951 1955 1959 1963 1967 1971 1975 1979 1983 1987 1991 1995 1999 2003

Year

Births

Ideal number of children TFR

Total fertility rate (TFR) and ideal family size, Japan, 1947-2009

Is it too late?

The Japanese Government was aware of it!

Not many people know it!

0

10

20

30

40

50

60

70

80

90

100

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005

Year

PPR(Percent)

M to 1B to M

1 to 2

2 to 3

3 to 44+ to 5+

Trends in period parity progression ratios (PPPRs), Japanese women, 1950-2005

Trends in the Percentage of Women Who Had an Arranged Marriage and the Courting Period Before Marriage by Year of Marriage: Japan, 1955-1996

Year

1955 1960 1965 1970 1975 1980 1985 1990 19950

10

20

30

40

50

60

70

0

0.5

1

1.5

2

2.5

3

Year of marriage

%

Courting period

Arranged marriage

Trends in the percentage of women who had an arranged marriage and

the courting period before marriage by year of marriage: Japan, 1955-1996

Proportion of first births conceived before marriages

0

5

10

15

20

25

30

35

1958 1963 1968 1973 1978 1983 1988 1993 1998 2003

Year of marriage

Figure 12. Trend in the proportion of newly married couples who coresided with parents at the time of marriage: 1955-2002

Note: Computed from pooled data from various rounds of the National Survey on Family Planning and the 2004 National Survey of Population, Families, and Generations.

0

10

20

30

40

50

60

70

1955 1960 1965 1970 1975 1980 1985 1990 1995 2000

Year of marriage

Per

cent

If today’s marriage market remains

unchanged,

30% men will remain

unmarried…

12 million “parasite single”

persons (below 35)Since the early 1990s, the proportion of single women who are not dating

has been stable around 45%

Young men taking notes during the lecture on love-related matters at one of the open colleges in Tokyo

PRESIDENT 20060814 号　花婿学校　模擬デート

Parents desperately looking for their kids’ prospective mates

結婚相談所オフィス・アン主催の親が集まって子どもの見合い相手を探す交流会。（写真：札幌市開催の親の代理の見合いパーティー 。オフィス・アン代表者が挨拶をしているところで、親たちはその後子どものプロフィールを交換し合った。）

これまでに全国 13 都市で 57 回開催し、延べ約 6500 人が参加した。参加費は札幌市（ 5000 円）を除き、 1 万円。

毎日新聞　夕刊　 2008 年 7 月 16 日（水）特集ワイド「親の結婚活動（婚活）　一生の大事任せなさい！？」

R25 「ライフいま、奈良で話題の“写経合コン”をマネしたら・・・」 (http://r25.jp/magazine/ranking_review/10008000/1112006111615.html)(2008/06/14アクセス )

2006 年 11 月 8 日、「なら出会いセンター」は世界遺産の薬師寺での写経をしながらの合コンを実施した。

参加者は僧侶による結婚をテーマにした法話を聞いた後、良縁成就祈願の写経を体験。写経の後、 1 対 1 のトークタイムが設けられた。

定員男女各 20 名のところ 150 を超える応募があった。本合コンでは 10 組以上のカップルが誕生した。

奈良県の 2005 年の出生率は東京 (0.98) に次いで全国ワースト 2 位 (1.12) 。同県は 2005 年 4 月、「なら出会いセンター」を開設。同年 7 月から地元のホテルやレストランなどと協力して出会いイベントを始めた。最初の 1 年間で誕生したカップルはわずか 6 組と振るわず、 2 年目の取り組みとして、平城京跡のボランティア清掃と出会いイベントを組み合わせたところ、問い合わせが殺到し、応募者は定員の 5 倍強に当たる 210 人に達した。

奈良県主催、世界遺産薬師寺で「写経合コン」

Nikkei Net Kansai 「自治体、出会いお膳立て—関西女性高い未婚率」 (http://www.nikkei.co.jp/kansai/news/news003661.html) (2008/06/14 アクセス）

少子化対策、奈良県が奇策　世界遺産・薬師寺で「合コン」 (2006/10/13) 産経新聞　大阪　夕刊。 ( 日経テレコン）奈良日日新聞 (2006/11/19) ( http://www.naranichi.co.jp/20061119cy23.html) (2008/06/14 アクセス）

The Government’s The Government’s “hard-to-believe” “hard-to-believe”

campaigncampaign

““Women have a thing foWomen have a thing for men who own JGBr men who own JGB

s!!...Right?”s!!...Right?”

1973–2009 (baby bust)

●TFR gradually falls from 2.14 to 1.37

●Although a substantial part of the decline in the TFR has been due to later marriage and less marriage, marital fertility has been playing a considerably important role, too. Thus, the government has been making a series of strenuous efforts to boost marital fertility.

Major Japanese government measures aimed at raising fertility

2.14 1972 Establishment of child allowances (initially no pronatalist intent)1.54 1990 Establishment of inter-ministry committee for “Creating a

sound environment for bearing and rearing children”1.53 1991 Enactment of Childcare Leave Act1.5 1994 Announcement of Angel Plan for 1995-991.42 1995 Enactment of Childcare and Family Care Leave Act1.34 1999 Announcement of New Angel Plan for 2000-041.33 2001 Amendment to the Employment Insurance Law, specifying

40 percent of salary to be paid to regular full-timeemployees during childcare leave

1.32 2002 Announcement of “plus one” plan1.29 2003 Enactment of “next generation” law

2003 Enactment of law on “Basic Measures to Cope with aDeclining Fertility Society”

1.29 2004 Announcement of New Angel Plan for 2005-091.29 2004 Revision of Childcare and Family Care Leave Act

Net result of fertility-raising measures so far

Fertility has continued to declineTFR was 1.26 in 2005, and 1.37 in 2009TFR for 1989 was 1.57 (which was a base for newly coined term “1.57 shock”)

But it probably would have declined even more without these measures

10

15

20

25

30

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

(in millions)

Number of childrenNumber of cats and dogs

Year

Number of pets and children, 1994-2008, Japan

Source ： Statistics Bureau of Ministry of Internal Affairs and Communications, and Pet Food Manufacturers Association of Japan (various years) “Survey on the Percentage of Households Keeping Dogs and Cats” http://www.jppfma.org/shiryo/shiryo-set.html.

How about fertility trends in

other Asian countries?

Cultural Divide in Fertility

Group 1: TFR above 1.5—Nordic countries, all the English-speaking countries, and the French and Dutch speaking countries in Western Europe

and industrialized East Asian countries (presently lowest in the entire world)

Group 2: TFR below 1.5—Southern European countries, all German-speaking countries of Western Europe

年次

Change in the total fertility rate over time, Japan, South Korea and Taiwan

（人）

Source日本：厚生労働省 (2010) 「平成 21 年人口動態統計」。台湾： Department of Statistics, Ministry of Interior “Statistics Yearbook of Interior” and Council for Economic Planning and Development “Population Projections for R.O.C (Taiwan): 2010-2060, Annex.”韓国： Statistics Korea, various years, “Birth and Death Statistics,” and “Birth Statistics” & Jun (2005) “The transition to sub-replacement fertility in South Korea: implications and prospects for population policy. The Japanese Journal of Population, Vol. 3, No. 1, pp.26-57.

0

1

2

3

4

5

6

7

8

1947 1952 1957 1962 1967 1972 1977 1982 1987 1992 1997 2002 2007

Japan Korea Taiwan

0

10

20

30

40

50

60

70

80

90

100

1950-1955

1955-1960

1960-1965

1965-1970

1970-1975

1975-1980

1980-1985

1985-1990

1990-1995

1995-2000

2000-2005

2005-2010

2010-2015

2015-2020

2020-2025

2025-2030

2030-2035

2035-2040

2040-2045

2045-2050

Figure 1. Proportion of the population with below replacement-level fertility in Asia’s total population

Year

Source: United Nations, Department of Economic and Social Affairs, Population Division, World Population Prospects: The 2008 Revision, New York, 2009 (advanced Excel tables).

(%)

Declining Declining MortalityMortality

Increasingly important Increasingly important demographic source of demographic source of population aging at a population aging at a

later stage, particularly later stage, particularly when ewhen e00 exceeds 70 exceeds 70

yearsyears

Changes in life expectancy for entire Asia, 1950-2050

Source: United Nations, 2007, World Population Prospects: The 2006 Revision.

0

10

20

30

40

50

60

70

80

90

1950-1955 1960-1965 1970-1975 1980-1985 1990-1995 2000-2005 2010-2015 2020-2025 2030-2035 2040-2045

(Years)

Figure 2. Total dependency ratio for Asia as a whole, 1950-2050

Source: United Nations, 2007, World Population Prospects: The 2006 Revision.

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Total (0-14)+(65+)/(15-64)

Young (0-14)/(15-64)

Old (65+)/(15-64)

Oldest old (85+)/(15-64)

Year

An innovative approach to An innovative approach to analyzing some of the analyzing some of the

aging-related problems:aging-related problems:

National Transfer National Transfer Accounts (NTA)Accounts (NTA)

Basic Features of the Basic Features of the National Transfer Account National Transfer Account

((NTANTA) Project) Project

●union of macro-level (public) and micro-level (familial) data

●interplay among various age groups (age-specific)

●consistent with the System of National Income

The NTA system will provide The NTA system will provide important new information important new information relevant to the following relevant to the following

issues:issues:

①Analysis of the two demographic ①Analysis of the two demographic dividends dividends

②Intergenerational Equity and Poverty ②Intergenerational Equity and Poverty ③Aging Policy③Aging Policy

④Childbearing Incentives ④Childbearing Incentives

..

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90+

Age

Million yen

Labor Income

Consumption

Private consumption

The Economic Lifecycle Japan’s Most Important Graph

Composition of total consumption for Japan in 2004Composition of total consumption for Japan in 2004

0

50

100

150

200

250

300

350

400

450

500

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90

Age

Thousand yen

Education (private) Education (public) Health (private) Health (public)

Others (private) Others (public) Durable (private) Housing (private)

Other Social Program (public) Capital (public)

USA, 2003

Austria, 2000

Sweden, 2003

Germany, 2003

0

0.3

0.6

0.9

1.2

1.5

0 10 20 30 40 50 60 70 80 90+ 0

0.3

0.6

0.9

1.2

1.5

0 10 20 30 40 50 60 70 80 90+ 0

0.3

0.6

0.9

1.2

1.5

0 10 20 30 40 50 60 70 80 90+ 0

0.3

0.6

0.9

1.2

1.5

0 10 20 30 40 50 60 70 80 90+

Japan, 2004

Finland, 2004

Spain, 2000

Slovenia, 2004

0

0.3

0.6

0.9

1.2

1.5

0 10 20 30 40 50 60 70 80 90+ 0

0.3

0.6

0.9

1.2

1.5

0 10 20 30 40 50 60 70 80 90+ 0

0.3

0.6

0.9

1.2

1.5

0 10 20 30 40 50 60 70 80 90+ 0

0.3

0.6

0.9

1.2

1.5

0 10 20 30 40 50 60 70 80 90+

Taiwan, 1998

Korea, 2000

Hungary, 2005

Mexico, 2004

0

0.3

0.6

0.9

1.2

1.5

0 10 20 30 40 50 60 70 80 90+ 0

0.3

0.6

0.9

1.2

1.5

0 10 20 30 40 50 60 70 80 90+ 0

0.3

0.6

0.9

1.2

1.5

0 10 20 30 40 50 60 70 80 90+ 0

0.3

0.6

0.9

1.2

1.5

0 10 20 30 40 50 60 70 80 90+

Chile, 1997

Costa Rica, 2004

Uruguay, 1994

Brazil, 1996

0

0.3

0.6

0.9

1.2

1.5

0 10 20 30 40 50 60 70 80 90+ 0

0.3

0.6

0.9

1.2

1.5

0 10 20 30 40 50 60 70 80 90+ 0

0.3

0.6

0.9

1.2

1.5

0 10 20 30 40 50 60 70 80 90+ 0

0.3

0.6

0.9

1.2

1.5

0 10 20 30 40 50 60 70 80 90+

Thailand, 2004

Indones ia, 200 5

China, 2002

Philippines, 1999

0

0.3

0.6

0.9

1.2

1.5

0 10 20 30 40 50 60 70 80 90+ 0

0.3

0.6

0.9

1.2

1.5

0 10 20 30 40 50 60 70 80 90+ 0

0.3

0.6

0.9

1.2

1.5

0 10 20 30 40 50 60 70 80 90+ 0

0.3

0.6

0.9

1.2

1.5

0 10 20 30 40 50 60 70 80 90+

India, 200 4

Nigeria, 2004

Kenya, 1994

0

0.3

0.6

0.9

1.2

1.5

0 10 20 30 40 50 60 70 80 90+ 0

0.3

0.6

0.9

1.2

1.5

0 10 20 30 40 50 60 70 80 90+ 0

0.3

0.6

0.9

1.2

1.5

0 10 20 30 40 50 60 70 80 90+

012

111 21 31 4151 61 71 81 91

YL

C

CF

CG

Source: Tung forthcoming.

Components of US Consumption, 2003

Public Other

Private Other

Private DurablesPrivate Health

Private Edu

Public Edu

Public Health

0

20000

40000

0 10 20 30 40 50 60 70 80 90

Age

Later I will measure HK investmentAs sum of pub and priv spendingon hlth and educ as shown here.

Unlike Taiwan and other Third World, in US cons rises strongly with age. True in other industrial too.

44

（ Million yen ）

0

1

2

3

4

5

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90+

Consumption （ Public and private)

Labor income

Age

Japan’s Most Important Graph 　

(Per-capita lifecycle)

0

1

2

3

4

5

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90+

(Million yen)

Age

Consumption (public and private)

Labor income

-3

-2

-1

0

1

2

3

4

5

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90+

Age

Age profile of per capita lifecycle deficit, Japan: 2004

(Million yen)

0

1

2

3

4

5

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90+

(Million yen)

Age

Age specific profile of per capita consumption and labor income

Deficit

Deficit

Surplus

-3

-2

-1

0

1

2

3

4

5

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90+

Age

Million yen

Public &

Familial Transfers

Asset Reallocations

Asset Reallocations

Total Reallocations:Lifecycle Deficits

1984

Changing pattern of three components of per capita reallocation of lifecycle deficits in Japan

-4.0

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90+

Age

Mill

ion

yen

(rea

l pric

es in

200

0)

Asset-based reallocations Public transfers Private transfers Lifecycle deficit

1989Changing pattern of three components of per capita reallocation of lifecycle deficits in Japan

-4.0

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90+

Age

Mill

ion

yen

(rea

l pric

es in

200

0)

Asset-based reallocations Public transfers Private transfers Lifecycle deficit

1994Changing pattern of three components of per capita reallocation of lifecycle deficits in Japan

-4.0

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90+

Age

Mill

ion

yen

(rea

l pric

es in

200

0)

Asset-based reallocations Public transfers Private transfers Lifecycle deficit

1999Changing pattern of three components of per capita reallocation of lifecycle deficits in Japan

-4.0

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90+

Age

Mill

ion

yen

(rea

l pric

es in

200

0)

Asset-based reallocations Public transfers Private transfers Lifecycle deficit

2004Changing pattern of three components of per capita reallocation of lifecycle deficits in Japan

-4.0

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90+

Age

Mill

ion

yen

(rea

l pric

es in

200

0)

Asset-based reallocations Public transfers Private transfers Lifecycle deficit

Impact of Impact of Population Aging:Population Aging: from per capita to total from per capita to total

populationpopulation

1984

Changing pattern of three components of reallocation of lifecycle deficits in Japan, adjusted to the total population

-6

-4

-2

0

2

4

6

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90+

Age

Tril

lion

yen

(rea

l pric

es in

200

0)

Asset-based reallocations Public transfers Private transfers Lifecycle deficit

1989

Changing pattern of three components of reallocation of lifecycle deficits in Japan, adjusted to the total population

-6

-4

-2

0

2

4

6

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90+

Age

Tril

lion

yen

(rea

l pric

es in

200

0)

Asset-based reallocations Public transfers Private transfers Lifecycle deficit

1994

Changing pattern of three components of reallocation of lifecycle deficits in Japan, adjusted to the total population

-6

-4

-2

0

2

4

6

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90+

Age

Tril

lion

yen

(rea

l pric

es in

200

0)

Asset-based reallocations Public transfers Private transfers Lifecycle deficit

1999

Changing pattern of three components of reallocation of lifecycle deficits in Japan, adjusted to the total population

-6

-4

-2

0

2

4

6

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90+

Age

Tril

lion

yen

(rea

l pric

es in

200

0)

Asset-based reallocations Public transfers Private transfers Lifecycle deficit

2004

Changing pattern of three components of reallocation of lifecycle deficits in Japan, adjusted to the total population

-6

-4

-2

0

2

4

6

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90+

Age

Trillion yen (real prices in 2000)

Asset-based Reallocations Public Transfers Private Transfers Lifecycle Deficit

Per capita net public transfers received, Japan, 1984-2004

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

0 10 20 30 40 50 60 70 80 90+

Age

Million yen (2000 constant prices)

1984

1989

1994

1999

2004

0 10 20 30 40 50 60 70 80 90

1984

1989

1994

1999

2004

Age

22

22

22

22

22

60

60

61

61

62

●●The public sector tends The public sector tends to be tardy in responding to be tardy in responding

to Japan’s rapidly to Japan’s rapidly changing age structure changing age structure

and social needs.and social needs.

● ● The public sector tends The public sector tends to be tardy in responding to be tardy in responding

to Japan’s rapidly to Japan’s rapidly changing age structure changing age structure

and social needs.and social needs.

The private sector The private sector responds more rapidly responds more rapidly like…like…

Per capita net private transfers received, Japan, 1984-2004

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

0 10 20 30 40 50 60 70 80 90+

Age

Million yen (2000 constant prices)

1984

1989

1994

1999

2004

0 10 20 30 40 50 60 70 80 90

1984

1989

1994

1999

2004

Age

27

28

29

30

31

63

64

71

74

77

Change in crossing ages for net familial transfers, Japan, 1984-2004

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

0-14 15-29 30-44 45-59 60-74 75+

Age group

Mill

ion

ye

nNet intra-household transfers received by age groups

Transfer Givers

Transfer Receivers

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

0-14 15-29 30-44 45-59 60-74 75+

Age group

Mill

ion

ye

nNet intra-household transfers received by age groups

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

0-14 15-29 30-44 45-59 60-74 75+

Age group

Mill

ion

ye

nNet intra-household transfers received by age groups

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

0-14 15-29 30-44 45-59 60-74 75+

Age group

Mill

ion

ye

nNet intra-household transfers received by age groups

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

0-14 15-29 30-44 45-59 60-74 75+

Age group

Mill

ion

ye

nNet intra-household transfers received by age groups

Transfer Givers

In Japan, the elderly In Japan, the elderly are playing the role are playing the role

of the society’s of the society’s safety net…safety net…

Public pensions are a highly Public pensions are a highly dependable source of income dependable source of income

for the elderly.for the elderly.

The employment for their The employment for their middle-aged sons and middle-aged sons and daughters has been daughters has been unstable since the unstable since the

beginning of “Japan’s lost beginning of “Japan’s lost decade”.decade”.

In Japan, the cost of In Japan, the cost of the elderly has been the elderly has been rising, and so is the rising, and so is the case of the cost of case of the cost of

children, as shown in children, as shown in the following two the following two

graphs:graphs:

1984

Changing pattern of three components of per capita reallocation of lifecycle deficits in Japan

-4.0

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90+

Age

Mill

ion

yen

(rea

l pric

es in

200

0)

Asset-based reallocations Public transfers Private transfers Lifecycle deficit

2004Changing pattern of three components of per capita reallocation of lifecycle deficits in Japan

-4.0

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90+

Age

Mill

ion

yen

(rea

l pric

es in

200

0)

Asset-based reallocations Public transfers Private transfers Lifecycle deficit

How about How about Taiwan and Taiwan and Thailand?Thailand?

Lifecycle deficit of Taiwan, 1981-2004

-0.8

-0.6

-0.4

-0.2

0

0.2

0.4

0.6

0.8

1

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90

Age

LCD

/LY

(30-

49)

1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992

1993 1994 1995 1996 1997 1999 2000 2001 2002 2003 2004

Lifecycle deficit of Thailand, 1981-2004

-0.8

-0.6

-0.4

-0.2

0

0.2

0.4

0.6

0.8

1

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90

Age

LCD

/LY

(30-

49)

1981 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004

Are they competing Are they competing for the limited for the limited

financial resources? Is financial resources? Is there any evidence of there any evidence of the the “crowding-out” “crowding-out”

effecteffect between them? between them?

6

8

10

12

14

16

18

6 8 10 12 14 16 18 20 22 24

Thailand Japan Taiwan

81

8283

84

85

8687

88

89

90

92

9394

91

95

96

97

98

99

2000

01

02

03

81

86

9092

88

94

96

98

2000

0204

84

89

94

99

04

Elderly LCD / YL(30-49): years

Ch

ild L

CD

/ Y

L (

30

-49

): y

ea

rs

y = 0.2798x + 6.2642R2 = 0.3251

5

7

9

11

13

15

17

5 10 15 20 25 30

LCD for the elderly / YL30-49: years

LC

D f

or

child

ren

/ Y

L3

0-4

9

ye

ars

Mexico 2004

Brazil 1996

Japan 2004

Taiwan 2003

US 2003

Germany 2003

Austria 2000

Chile 1997

Finland 2004Sweden 2003

Costa Rica 2004

India 2004

Thailand 2004

France 2001

Uruguay 2006

China 2002

Kenya 1994

Indonesia 2005

Hungary 2005

Nigeria 2004

Slovenia 2004

Senegal 2005

Spain2000

Philippines1999

South Korea2000

Normalized per capita LCD for children vs that of the elderly in Asian countries

y = 0.4822x + 4.0752 R2 = 0.4703

5

7

9

11

13

15

17

5 10 15 20 25 30

Japan 2004

Taiwan 2003

India 2004

Thailand 2004

China 2002

Indonesia 2005

Philippines1999

South Korea 2000

Elderly LCD / YL(30-49)

Ch

ild L

CD

/ Y

L (

30

-49

)

y = -0.0224x + 10.765 R2 = 0.0072

5

7

9

11

13

15

17

5 10 15 20 25 30

US 2003

Germany 2003

Austria 2000

Finland 2004

Sweden 2003

France 2001

Hungary 2005

Slovenia 2004

Spain2000

Elderly LCD / YL(30-49)

Ch

ild L

CD

/ Y

L (

30

-49

)

Normalized per capita LCD for children vs that of the elderly in Western countries

y = 0.3495x + 4.6381R2 = 0.589

5

7

9

11

13

15

17

5 10 15 20 25 30

Mexico 2004

Brazil 1996

Chile 1997

Costa Rica 2004

Uruguay 2006

Elderly LCD / YL(30-49)

Ch

ild L

CD

/ Y

L (

30

-49

)

Normalized per capita LCD for children vs that of the elderly in Latin American countries

The Sandwich The Sandwich GenerationGeneration

In almost every country, working-age In almost every country, working-age adults are relying heavily on assets adults are relying heavily on assets to meet their own material needs to meet their own material needs and their familial and social and their familial and social obligations to other generations. obligations to other generations.

They are saving, but substantially They are saving, but substantially less than the income earned from less than the income earned from assets.assets.

A Simple Calculation for Japan

Working years

Lifecycle deficit per child ・・・・・Lifecycle deficit in retirement ・・

TFRTFR

Work longer, live longer!

How many children?

Any further extension of longevity?

2004

34 years of LY

years of mean LY13

21 years of mean LY

2004・・・・・(in )

1.291.29

A Simple Calculation for Japan

Working years

Lifecycle deficit per child ・・・・・Lifecycle deficit in retirement ・・

TFRTFR

1984

35 years of LY

years of mean LY10

14 years of mean LY

1984・・・・・(in )

1.811.81

A Simple Calculation for Taiwan

Working years

Lifecycle deficit per child ・・・・・Lifecycle deficit in retirement ・・

TFRTFR

1981

44 years of LY

years of mean LY8

8 years of mean LY

1981・・・・・(in )

2.462.46

A Simple Calculation for Taiwan

Working years

Lifecycle deficit per child ・・・・・Lifecycle deficit in retirement ・・

TFRTFR

2003

32 years of LY

years of mean LY17

18 years of mean LY

2003・・・・・(in )

1.241.24

Working years

Lifecycle deficit per child ・・・・・Lifecycle deficit in retirement ・・

TFRTFR

1981

37 years of LY

years of mean LY8

9 years of mean LY

1981・・・・・(in )

3.693.69

A Simple Calculation for Thailand

Working years

Lifecycle deficit per child ・・・・・Lifecycle deficit in retirement ・・

TFRTFR

34 years of LY

years of mean LY10

16 years of mean LY

2004・・・・・(in )

1.661.66

A Simple Calculation for Thailand

2004

Is the cost of children Is the cost of children related to the number related to the number of children in Japan as of children in Japan as

well as other Asian well as other Asian countries? countries?

JPN(89)

THAI(04)

KOR(04)

JPN(04

JPN(99)

JPN(94)

JPN(84)

0

5

10

15

20

25

1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4 2.6 2.8 3.0

TFR

Ch

ild L

CD

/ Y

L (

30

-49

)

ln(child LCD)=3.0548-1.151 * ln(TFR)

R2=0.526

Figure 5. TFR vs. normalized per capita LCD for children in selected Asian countries

Note: The dots with no designation are values for Taiwan.

0

5

10

15

20

25

1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4 2.6 2.8 3.0

TFR

Child LCD / YL (30-49)

ln(child LCD)=2.893-1.080 * ln(TFR)

R2=0.924

Figure 6. TFR vs. normalized per capita LCD for children in Japan, 1984-2004

THAI(04)

JPN(84)JPN(89)

KOR(04)JPN(94)

JPN(99)

JPN(04)

0

1

2

3

4

5

6

7

8

9

1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4 2.6 2.8 3.0

TFR

Ch

ild h

um

an

ca

pita

l / Y

L (

30

-49

)

ln(child human capital )=2.131-1.695 * ln(TFR)

R2=0.609

TFR vs. normalized per capitaTFR vs. normalized per capita human capital spending human capital spending for children in selected for children in selected Asian countriesAsian countries

Quantity-Quality Tradeoff: interpretation of elasticities

• ln C = b0 +b1 ln Nwhere C=cost per child and • N=number of children

• ln CN (cost per adult) =• b0 + (b1+1) ln N• KEY: b1 > -1 or < -1

　　

●20 NTA countries: -0.91

●USA (1980-2003): -0.72

●East Asia (+Thailand):

-1.70

Are Asian Are Asian children public children public

goods or goods or private goods?private goods?

Proportion of private spending in per capita educational costs for children aged 0-24 in selected countries

Country Year (%)Sweden 2003 3.1France 2001 5.0Austria 2000 5.8Slovenia 2004 8.7Hungary 2005 11.1United States 2003 17.0Costa Rica 2004 22.3J apan 2004 26.0Chile 1997 39.4Indonesia 2004 39.6Uruguay 1994 46.4The Philippines 1999 48.2Republic of Korea 2000 54.2Taiwan 2003 66.8

The “elasticity” result for The “elasticity” result for East Asia suggests:East Asia suggests:

the decline in the decline in numbers is offset by numbers is offset by an increase in human an increase in human capital and, hence, capital and, hence,

productivityproductivity

Japan’s untapped Japan’s untapped resource:resource:

Will Gary Becker’s Will Gary Becker’s

“quality” children be “quality” children be able to boost Japan’s able to boost Japan’s future productivity?future productivity?

Rank Country 2000 Country 2003 Country 2006 Country 2009

1 Japan 557 Hong Kong-China 550 Taiwan 549 Singapore 5622 Korea 547 Finland 544 Finland 548 Hong Kong-China 5553 New Zealand 537 Korea 542 Hong Kong-China 547 Korea 5464 Finland 536 Netherlands 538 Korea 547 Taiwan 5435 Australia 533 Liechtenstein 536 Netherlands 531 Finland 5416 Canada 533 Japan 534 Switzerland 530 Liechtenstein 5367 Switzerland 529 Canada 532 Canada 527 Switzerland 5348 United Kingdom 529 Belgium 529 Macao-China 525 Japan 5299 Belgium 520 Macao-China 527 Liechtenstein 525 Canada 527

10 France 517 Switzerland 527 Japan 523 Netherlands 52611 Austria 515 Australia 524 New Zealand 522 Macao-China 52512 Denmark 514 New Zealand 523 Bergium 520 New Zealand 51913 Iceland 514 Czech Republic 516 Australia 520 Beljium 51514 Liechtenstein 514 Iceland 515 Estonia 515 Australia 51415 Sweden 510 Denmark 514 Denmark 513 Germany 51316 Ireland 503 France 511 Czech Republic 510 Estonia 51217 Norway 499 Sweden 509 Iceland 506 Iceland 50718 Czech Republic 498 Austria 506 Austria 505 Denmark 50319 United States 493 Germany 503 Slovenia 504 Slovenia 50120 Germany 490 Ireland 503 Germany 504 Norway 498

* excluding Shanghai, China

Mean score in student performance on the mathematics scale

Sources: Ministry of Education, Culture, Sports, Science and Technology (2007) Summary of PISA 2006 results, accessed on December 24, 2009 （http://www.mext.go.jp/a_menu/shotou/gakuryoku-chousa/sonota/071205/001.pdf） and OECD (2010) Volume I of Pisa 2009 Results: What Students Know And Can Do, Paris, OECD.

Then, can we Then, can we rely on our rely on our

future future children?children?

More serious More serious sources of sources of

uncertainties uncertainties for Japan?for Japan?

Sources: Mainichi Newspapers of Japan, Summary of Twenty-fifth National Survey on Family Planning, 2005.

Mainichi Newspapers of Japan, Summary of the 2004 round of the National Survey on Population, Families and Generations, 2004.

Nihon University Population Research Institute, National Survey on Work and Family, 2007.

Year

(%)

Trends in values and expectations about care for the elderly: Japan, 1950-2007

“Good custom” or “Natural duty”

“Expect to depend on children”

0

10

20

30

40

50

60

70

80

90

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005

Those aged 50+ living in Those aged 50+ living in Tokyo Metropolitan AreaTokyo Metropolitan Area

Husbands Husbands 41%41%

Wives Wives 19%19%

Will the Sun Will the Sun rise again in rise again in

Japan 10 years Japan 10 years from now?from now?

Concluding RemarksConcluding Remarks

--DemographyDemography is not destiny is not destiny

-DemographyDemography defines various defines various possibilitiespossibilities

What do we choose?What do we choose?

Political leadership Political leadership counts,counts,

particularly in Japan!particularly in Japan!

Thank youThank you