Effects of Fatherhood on Male Wage and Labor Supply in Japan

Abstract

Using data from the Japanese Panel Survey of Consumers (JPSC) for the period 1994–2007, I examine the effect of childbirth on fathers’ wage rates and labor supply in Japan. I also compare the effects of fatherhood between different cohorts by dividing the JPSC sample into two birth-year cohorts (those born in or before 1960 and those born after 1960). The results show that the birth of children significantly increases hourly wage rates by 2.3% and annual work by 69 hours. Comparing these results to those of studies based in the United States and Germany shows that while the effect of childbirth on the Japanese male labor supply is large, it is relatively small on wage rates. The study also shows that childbirth has different impacts on labor market outcomes for the two cohorts. In the early cohort, the birth of children significantly increases wage rates, but has no significant effect on the labor supply. On the contrary, for the later cohort, the birth of children does not increase wage rates and there is a significant increase in the labor supply. Finally, I examine how the gender difference of children impacts labor market outcomes. Although its impact is not so large, the birth of sons has a larger effect than the birth of daughters.