Household spending on children’s pre-tertiary education is exceptionally high in Japan and South Korea, and has been cited as a cause of low fertility. Previous research attributes this high spending to a cultural emphasis on education in East Asian countries. In this paper, we argue that institutional factors, namely higher education and labor market systems, play an important role in reinforcing the pressure on parents to invest in their children’s education. We review evidence showing that graduating from a prestigious university has very high economic and social returns in Japan and South Korea, and examine the implications for fertility within the framework of quantity-quality models. Finally, we put forward ‘reverse one-child’ policies that directly address the unintended consequences of these institutional factors on fertility. These policies have the additional virtues of having very low fiscal requirements and reducing social inequality.

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Intergenerational transfers of care play a major role in elderly support in East Asia but take a toll on the well-being of married women.

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