Population density, fertility, and childcare services from the perspective of a two-region overlapping generations model

Abstract

In countries confronting the issue of low fertility, as Japan is, dual trends showing higher regional population density associated with lower fertility rates are being confirmed. It is therefore an important theme for analysis to deepen discussions related to reducing regional fertility disparities by increasing fertility through the implementation of comprehensive childcare support policies, which might facilitate the striking of a balance between child-rearing and work, even in highly populated regions. As described herein, we constructed a simple theoretical two-region Overlapping Generations (OLG) by incorporating migration and land prices. Using it, we analyzed effects of population density and childcare services on fertility. Results elucidated the following three points. First, in the presence of congestion costs associated with increased population density, the fertility rate of the region decreases with increased population density. However, if the time cost of child-rearing is brought down by raising the level of the childcare services provided in the region, then the effect of increased population density on fertility can be restrained. Second, when the effect of population size on productivity is less than a certain level, improvement in the childcare services raises the relative ratio of the population density. When the effect of population size on productivity exceeds a certain level, however, the relative ratio of the population density decreases if the relative ratio of the time cost of child-rearing decreases as a result of childcare service reform. Third, where each region imposes payroll tax on its residents and uses its tax revenue as the financial resources to adopt a decentralized strategy of providing childcare services to its region, the level of childcare services that maximizes the utility of a representative agent in each region is independent of the childcare services of any other region. Therefore, manipulation of the level of childcare services becomes a dominant strategy.

A Quantitative Study of Early Childhood Care and Education Services Under the Age of Three: Evidence From Sichuan Province, China

“…ECCE supply means to protect the rights of the child and to meet the needs of the child and their family to receive special help for care and education, as well as all services provided and measures taken by the department concerned (this mainly refers to administrative authorities, public or private institutions, social sectors, and so forth).The generally accepted norm is that governments should provide ECCE services as public goods to all children and their families (19), especially high quality and inclusive services, or to assist market institutions in providing ECCE services as quasi-public goods. Theoretical researchers or practitioners have stressed that the insufficiency of ECCE services has a direct impact on the realization of children's rights (38) and can lead to other negative consequences such as gender discrimination, weakened family functions, declining social fertility (20) and labor market shortages (39). In view of this, the international community attaches greater importance to ECCE services for children aged three and younger, and mainly assesses the status of supply from the following three dimensions.…”

“…The emphasis on ECCE has the dual function of sustaining parental employment, especially for women, and fostering child development (5,13). As for the country, the development of ECCE is an important means or tool to promote a country's human resources development (14), gender equality in the family and workplace (15)(16)(17), women's employment (18,19), increase the fertility rate (20,21), and reduce the intergenerational cycle of poverty (22). It has become one of the best investments a country can make in itself.…”

Determinants of Service Quality Factors and Parent Satisfaction in Childcare Centre

“…Childcare, or early childhood education and care (ECEC), is essential for a child's cognitive, social, and emotional growth, catering to children before primary school age. This sector's role in long-term child success is increasingly recognised as global demand for quality childcare rises (Hong et al, 2020;Ishida et al, 2018;Zhou & Oishi, 2005). ECEC plays a critical role in developing key skills in children.…”

Urbanization, waitlisted children, and childcare support in a two‐region overlapping generations model

“…(Ishida, Oguro, & Yasuoka, 2018) analyzed the impact of regional policy such as childcare policies on fertility or population density in an overlapping generations model with migration and land. Although their research perspective is similar to ours, the setting is different in several aspects; For instance, the engine of economic growth in their model is human capital accumulation, while that in ours is physical capital accumulation.…”