Interaction between public policy and social capital: Child-care policy and birth rate

This exploratory empirical study examines whether municipal policy for child care (i.e. institutional environment) enhances or counteracts the effect of its residents’ support network size (i.e. social capital embedded in network) on the expected number of their children. Residents living in four purposive sampled municipalities with progressive child-care policies (n=321) and those in four random sampled ordinary municipalities (n=310) in Nagano prefecture completed surveys about satisfaction with their municipal policies, support network size, and the number of their children. Descriptive statistics shows that the level of satisfaction with child-care policies, such as consulting service for child bearing/rearing and financial support for public education, is higher with residents of progressive municipalities than those of ordinary ones. An OLS regression of the number of children to progressive municipality dummy, support network size, and the interaction term of both of them controlled by age indicates that the interaction of municipality and network size has significantly negative effect on the number of children. This means that institutional environment (public policy) could diminish the necessity of social capital embedded in network for one’s life chance.