Non-regular Employment of Women, Fertility Rate, and Economic Growth

This study analyzes the interaction between non-regular employment of women and economic growth patterns by an overlapping-generations model. Declining Birthrate White Paper-Cabinet Office (2013) shows the ideal number of children per household is 2.42 compared to the current number of 2.07, which is the lowest so far in Japan. The main reason households do not have the ideal number of children is “the costs burden of childcare and education” and the ratio amounts to 60.4%. In recent years in Japan, households in which both the husband and the wife work are increasing, whereas those in which only the husband works are decreasing. Additionally, although women have same educational background and abilities as men, most women become non-regular employees after marriage and childbirth, which reduces household income. In such a situation, raising the rate of pension insurance will be a big burden for the household and the declining birthrate may be caused by high levels of educational expenditure and pension insurance. The Japanese government has discussed raising the wages of non-regular employees. This paper finds that a rise in the wage rate of non-regular employment is needed under the public pension policy that raises the rate of pension insurance, and it must be at an adequate level. That is, there is a high risk that this policy will have a negative effect on Japan’s economic growth if an adequate level is not achieved.

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