Part-time Employment of Married Women and Fertility in Urban Japan

Previous studies of female labor force participation in Japan often show that the estimates of female wage rates are "negative" in their single-equation models of labor supply. Based on the common belief that the substitution effect dominates the income effect for female labor supply, to disentangle the problem of the inconsistency is, therefore, necessary for the purpose of predicting the behavior of female labor supply and for guiding policy actions. In this paper, we have estimated a logit model of married women's part-time employment and a fertility equation in the context of a simultaneous-equation model. By specifically differentiating part-time employed married women from full-time employed married women,we find that the structural coefficients of the part-time labor supply are significantly different from those of the full-time labor supply in terms of elasticity. However, contrary to the result of married women's full-time employment, we find little interdependency between married women's decisions to work as part-time employees and their fertility in urban Japan.