Income Inequality Among Families with Children in the Society with Low Fertility Rates: Focusing on Japan with a Cross-National Perspective

The aim of the study is to examine the relationship between the fertility rates and the extent of income inequality among families with children. Japan has suffered from very low fertility rates since the mid-1970s, and, as a result, the number of families with children has decreased. Japan has tried to introduce several policies to increase fertility rates, without success, for about 15 years, and at the same time, she faces severe budgetary constraints for the social security system mainly due to the aging population. More importantly, in such circumstances, income inequality among children has increased. The study examines the mechanism in the high level of income inequality among families with few children and low fertility rates.

In order to make the situation of Japan clear, I employ cross-national comparison in this study. The data that I use are the Comprehensive Survey of People’s Living for Japan and Luxembourg Income Studies for other societies. The societies I compare with Japan are Germany, Spain, Taiwan, France, the United Kingdom, and the United States. Japan, Germany, Spain and Taiwan have low fertility rates, and the others relatively high. Three aspects are particularly discussed in my analyses: the degree of income inequality among families with children, the re-distribution between families with and without children, and the impact of a mother’s income in explaining income inequality.

I find that a low re-distribution between families with and without children and a low contribution of the mother’s work to household income are closely related to low fertility rates and high levels of income inequality among families with children. It appears, based on my analyses, that a lack of variation in the way to provide economic wellbeing to children is closely related to a high degree of income inequality and to a low fertility rate.