Joyce Shim, Columbia University School of Social Work Family Policy and Fertility Rate in Five East Asian Countries. Introduction

Transcription

1 Joyce Shim, Columbia University School of Social Work Family Policy and Fertility Rate in Five East Asian Countries Introduction With numerous factors that affect fertility rate such as female education and employment, contraception use, delayed or no marriage, cost of living, and the overall economy, more women today have less or no children. With prevalent trends of low fertility rate in most of the OECD countries, East Asian countries collectively face the lowest fertility rates; for instance, Singapore marked.78, Hong Kong , Taiwan 1.10, South Korea 1.23, and Japan 1.39 in Even compared to their western counterparts, for instance, European (e.g., Italy , Germany , Spain , Sweden , and France ) and English-speaking countries (e.g. Canada , Australia , U.K , and U.S ), the East Asian case seems more extreme and urgent. It is therefore understandable that governments in the region have been trying to address the issue of low fertility rate by introducing various forms of family policy 2. While there are numerous factors that may influence fertility trend, in this paper I will primarily investigate the impact of family policies over time in East Asia. I will first provide a brief descriptive analysis of family policies in five East Asian countries - Japan, South Korea, Singapore, Hong Kong, and Taiwan. I will then analyze the impact of family policies on fertility rate in above five countries between 1980 and While there has been some efforts to understand the overall East Asian welfare system, studies on the region still very lag compared to those on other developed regions. Now there have been a number of family policy development and reforms in East Asia and it would be important to have a clear policy overview of the region. Moreover, when it comes to empirical studies, literature on East Asia is even more lacking. Rich empirical research on the impact of family policies on fertility has been almost always exclusively targeted on Western Europe and English speaking OECD countries (Gauthier, 2007). Japan has been sometimes discussed though not specifically focused, and no knowledge on other East Asian countries is shared in the international academic community. It is partly because of the unavailability of (or difficult access to) data in English as well as the considerably recent implementation of policies in the region. In addition, there are no macro level analyses of multiple countries that included East Asian countries, except Japan for few cases and Korea once. While previous literature overall indicates the positive impact of family policies on fertility rate in developed countries, similar effects in East Asia are questionable and thus worth investigating. Terminology Before going further, the term fertility rate must be understood more clearly. There are two terminologies that are more used compared to others: the completed fertility rate (CFR) and total fertility rate (TFR); the latter is the most widely used measure for numerous studies as well as throughout my paper. TFR in a specific year is the average number of children who would be born to a synthetic cohort of women whose age-specific birth rates were the same as those actually observed in the year in question (Hotz & Miller, 1988). TFR reflects the interplay of two components, namely quantum tempo effects: the level (number of children) and timing (time of birth) of fertility. Therefore, it is affected by changes in the timing of childbearing; for instance, in years when timing of childbearing is advanced, the TFR is inflated relate to the level that would have been observed without such timing changes, and vice versa (Bongaarts and Feeney, 1998, 2000). In addressing this issue, many scholars have studied how this measure could and should be better used and adjusted (e.g. Bongaarts & Feeney, 1998, 2000; Kohler & Ortega, 2002; Philipov et al, 2006; Sobotka, 2004). In addition to understanding fertility rate terminologies, the term family policy ( policies ) must be also clearly understood given that there are many domains and thus different definitions. While there are a number of varied scopes and definitions of family policy (Kamerman, 2009), in this paper I will primarily use Gauthier s (1999) definition that emphasizes three crucial indicators for family policy measurement: (1) parental leave arrangements; (2) public childcare services; and (3) other financial supports such as cash benefits. Theoretical Framework 1 Hong Kong is a special administrative region (SAR) of China and I consider it separately rather than looking at the entire mainland. 2 There are other various aims of family policy implemented in different societies and countries such as poverty reduction, income maintenance, and gender equality promotion etc. For more retails, refer to Adema (2012). Shim - 1

2 There is no one single factor that entirely shapes women s fertility behaviors. The conventional explanation is based on the economic rational choice approach; for example, it would argue that individual s choice to have a child is the result of a utility maximization process that depends on the economic costs and benefits of children, subject to income constraints and individual s preferences (Becker, 1981; Cigno, 1991; Joshi, 1998). Therefore, according to the economic theoretical approach, any reduction in the cost of children (e.g. through various subsidies for child care, education, and health, as well as through cash benefits during maternity or parental leave) or any increase in income (e.g. through direct cash transfers or allowances as well as indirect benefits through the tax system) would be expected to increase the demand for children (Becker, 1981; Bjorklund, 2006; Castles 2003; Chesnais 1996; Del Boca et al, 2007; Englehard et al, 2004; Gauthier, 2007; McDonald 2000) 3. Such economic framework, therefore, can lead to the rationale in which generous family policies and benefits can positively influence fertility rate. Hakim (2003) proposed a notable alternative approach which has gotten much attention preference theory. She focuses on how three qualitatively different types of women make different fertility and work choices. They are namely (1) the home-centered who would choose a home-career over a work in labor market; (2) the work-centered who would more likely to choose a childless life due to the strongest commitment for their work in labor market; and (3) the adaptive who are somewhat in between the previous two types and want to have a career in both labor market and their home. However, the preference theory is based on the assumption that women in our modern time are able to make unconstrained decisions between work and family depending on their preferences, which becomes a controversial argument and reexamined by other studies (Vitali et al, 2009). Lastly, there also have been some scholars who called for the need of incorporating studies focusing on more macro-level and non-quantifiable factors. For instance, some noted that changing attitudes, values, and ideologies in a society and culture can play a significant role in changes in fertility trend and family and work structure (Sleebos, 2003). While many agreed with the importance of such factors, there are still many methodological as well as theoretical discussions to be made. Previous Studies There have been a number of empirical cross-national studies that compared multiple countries together though none of those studies focused on any of the East Asian countries (for more details, see Gauthier s literature review, 2007). Ekert (1986), using pooled data of 8 Western European countries from 1971 to 1983, found a positive effect of family policy on fertility based on OLS regressions. A similar study was conducted later where Blanchet and Ekert-Jaffe (1994), with pooled data from 11 Western European countries from 1969 to 1983, also concluded the same positive impact of policy on fertility using both OLS and two-stage least squares regressions. Winegarden (1995) based on macro-data of 17 OECD countries from 1959 to 1989 using fixed effect method suggested that maternity leave benefits have a positive effect on fertility rate. Gauthier and Hatzius (1997) used times-series regressions with data of 22 OECD countries from 1970 to 1990 focusing only on the impact of cash benefits on fertility and also found a positive effect though small. The 22 OECD included Anglo-Saxon, Southern, Continental, and Scandinavian countries only in this study as well. Japan, for example, was excluded though it shares many similarities with the English-speaking countries since it does not share the same history and links with Britain (Gauthier & Hatzius, 1997). Castles (2003), based on data of 21 OECD countries from 1960 to 1998 using OLS analyses, concluded that the average level of formal childcare has a positive impact on fertility. Japan was the only East Asian country included in this study along with other Western OECD countries. Del Boca et al (2003) compared four European countries to examine the impact of childcare availability using fixed effect and random effect models; the study found that childcare availability has a positive effect on fertility overall. Also, D Addio and Mira d Ercole (2005), in their analyses of 19 OECD cross-country differences of fertility rate in 1999 using pooled OLS estimators and pooled mean group estimator, showed that transfers to families with children and provision of services to working parents had a positive impact though small. Most recently, Luci and Thevenon (2011) looked at the impact of family policy packages (leave, cash, and service provision) on fertility trends in 18 OECD countries with data from 1980 to This comprehensive statistical analysis also concluded that family policy overall positively impacts fertility rate though the effect size varies across countries and welfare systems. While 3 As Becker (1960) and scholars after him mentioned, it is important to distinguish between the quantity and quality impact of an increase utility (due to the increased family policies and benefits). For instance, while a higher income (from higher benefits) can lead to higher demand for children in number, it may also lead to an increased demand for child s quality (Gauthier & Hatzius, 1997). Shim - 2

3 the study included Japan and Korea, considering the unique historical, social, and cultural characteristics of East Asia, it would be interesting to focus on the region separately for the first time. East Asian Welfare Model Since Esping-Andersen s (1990) study on the three welfare regimes (i.e. Social Democratic, Continental Conservative Europe, and Liberal regimes), there has been much discussion on how some of the OECD countries do not fit into such a regime categorization any longer (Aspalter, 2006; Goodman & Peng, 1996; Jones, 1993; Kwon, 1996). One important development of the welfare state scholarship is concerning East Asian countries. Though Japan has been receiving some attention previously, the East Asian welfare model is relatively a new term in this topic and thus there still exist different opinions about it. In the East Asian welfare model, there has been an emphasis on the heavy concentration of social and human investment especially through education and healthcare, mostly for political and economic purposes, at least in the 1940s and 50s (Gough, 2002). Governments faced the urgent responsibilities and obligations to appeal their citizens for nation s legitimacy, recovery, and stability after the defeat at the Second World War (Japan) and departure from the Japanese colonization (other East Asian countries). This may be a reason that East Asian countries had to rather abruptly and dramatically develop their own social welfare system. Jones (1993), referring to those East Asian countries as Confucian welfare states, focused on how they all developed an economy centered around grand national corporation(s) and share their qualities of governance in topdown-consensus by persuasion and/or imposition (pp. 188). Goodman and Peng (1996), with yet another term to refer to those countries as Japan-focused East Asian regimes, discussed the distinctive commonalties shared by Japan and the four Tiger East Asian countries in various sectors of society. Esping-Andersen (1997) used the term, hybrid, to imply the mixed features from the Social Democratic, Conservative, and Liberal welfare regimes, sharing with the Nordic social democratic regime a strong commitment to full employment, with the liberal regime the safety net and heavy reliance on private welfare (Mahon, 2002), and also with Continental Europe a strong emphasis on the family and the importance of corporate or occupational welfare (Peng, 2002, p. 33). The term productivist welfare capitalism in East Asia was explored to understand its overall trend in welfare policy as well (Holliday, 2000); author stated that the system is characterized as growth-oriented state and subordination of all aspects of state policy, including social policy, to economic and industrial objectives (pp. 709). Thus it seems that the East Asian experience is distinctive, differing decisively from the Euro-American models current in social policy discourse (Aspalter, 2006; Kwon, 1998, pp. 27). As were in discussions regarding other welfare regimes, it is important to note that there are various even competing arguments when it comes to the East Asian welfare model (Deyo, 1992; Goodman & Peng, 1996, 1998; Kim, 2008; Kwon, 1997; Ramesh, 1995). It is understandable since there surely are significant social, economic, political, and cultural variations among countries though they are clustered in the same regime. Regardless, as done for other countries and regime clusters, it would be meaningful to understand the overall trend of social and family policy in East Asia as well as in each country. After all, East Asian countries do share many historical links and similarities with each other, and therefore, it would be interesting to examine the overall policy trend in the region. It is even more important to link the significance of such policy development to fertility rates, which are, as mentioned above, one of the lowest in the world. Family Policies in East Asia With regard to leave arrangements, most OECD countries provide at least 3 months of paid job absence and an average of 10 months of leave. In addition, the International Labour Organization (ILO) recommends no less than 14 weeks of paid maternity leave (Fend & Han, 2010) and the European Union members also provide much more generous paid and non-paid benefits for both mothers and families. For instance, the UK provides 65 weeks of leave with 12 weeks at full pay and Canada 52 weeks with 29 weeks at full paid. Social Democratic countries grant mothers weeks with full-time wage replacement, and Conservative countries provide about 12 to 16 weeks of fully paid leave. However, on average East Asia falls far below those levels (Japan 26 weeks, South Korea 12, Singapore 12, Hong Kong 10, and Taiwan 8). This is rather telling since all of the five East Asian countries play a bigger economic role in the world now. With the dramatic and fast GDP growth within a short period of time, the East Asian economies now reach those of highly developed countries and governments are trying to meet other various international standards and Shim - 3

4 norms such as labor law, gender equity, and human rights. East Asian countries have been trying to improve and did expand their family policy provision in recent decades and I would like to examine whether such efforts have been influencing their fertility rate trends. Indeed, the family policy debates in Asian OECD countries are largely fuelled by concerns about the persistently low birth rates (Adema, 2012). Data and Method of Analysis I examine five East Asian countries (Japan 4, South Korea, Singapore, Hong Kong, and Taiwan,) between 1980 and 2010 with data collected from national statistical institutes and various government and research agencies as well as international organizations such as the UN, ILO, OECD, IMF, UNESCO, and World Bank. The outcome variable is total fertility rate (TFR). I use data on fertility from World Bank for all countries except Taiwan; data for Taiwan was obtained from its Ministry of Interior. My independent variables are family policy measures which are similar to those of Luci and Thevenon (2011) with some variations. They are (1) spending per birth (in % of GDP per capita), including maternity, paternity, and parental leave benefits as well as birth grants; (2) spending on childcare services per child under age three (in % of GDP per capita); and (3) spending on cash benefits per child under age 20 (in % of GDP per capita). In addition, I also include two more variables to take into consideration leave and childcare policies: (4) the number of leave weeks, adding paid maternity leave weeks and the number of parental leave weeks women are entitled to take after maternity leave per se; and (5) childcare enrollment of children under age 3 (as % of the total number of children of this age group). I also include other important control variables taken from previous research such as female employment rate, female tertiary education, unemployment rate, real GDP per capita, and public expenditures in health care as % of GDP, as well as newly incorporated ones such as marriage rate and divorce rate. I use ordinary least squares regression (OLS) for estimating the effect of family policy measures illustrated above on fertility rate in East Asia. The model used is also similar to that used by Luci and Thevenon (2011) since the study is the most recent research on the same topic looking at the impact of family policies on fertility rate in multiple countries over a certain period of time. I use three models to see the impact of family policies including time and year fixed effect variables in all cases; they are (1) country-specific fixed effects; (2) year-specific fixed effects; and (3) country-specific linear time trends. As done in previous studies similar to mine, I also include both county and year dummy variables (all dichotomous) to control for the specific fixed effects of each country over a time period and of each year for all countries Last but not least, to capture country-specific time-varying effects, I also include countryspecific leaner time trend dummy variables, which will be further explained in the longer version of my paper. The way I fill missing values is similar to the study done by Tanaka (2005) with some variations, which will be also further discussed in detail in the actual paper. Limitation and Future Implications While my paper has its own contributions to literature on this topic, such research on multi-national comparisons has its own limitations. For instance, as briefly mentioned above, though countries do share many commonalities in each welfare paradigm, policy variations (i.e. length or quality of benefits) across countries still exist and they make it difficult to conduct to such cross-national analyses on an aggregate level (Gauthier, 2007). In addition, unobservable factors that are important might not have been included such as societal, cultural, and values, which are unquantifiable and thus cannot measure their changes and impact. Nonetheless, the paper provides a crucial platform for further research concerning East Asian countries and their family policies and fertility trends. Last but not least, I sincerely hope that this study provides and promotes an awareness of the need of various datasets specifically focused on the region, something comparable to those of the EU and OECD. For future research on East Asian countries, which continue to grow as an economic and political power and influence over the international community, such efforts in collecting data would be a crucial and rather urgent assignment. 4 I am grateful to Sakiko Tanaka for sharing her dataset on 18 OECD countries over 1969 to Tanaka developed the original dataset first constructed by Professor Christopher Ruhm by adding the years from 1995 to 2000 and two additional countries the US and Japan. While both Tanaka and Ruhm gathered the data for their research to measure the impact of parental leave policy on infant mortality, the dataset was extremely useful since there are a number of important variables which I must incorporate in my paper as well as data for Japan. Shim - 4

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