Abstract
This study employs Japanese household-level data to quantify the extent to which congestion diseconomy in large cities affects married couples’ fertility behavior. The theoretical model of this study emphasizes the importance of controlling for preference heterogeneity in the demand for children. The baseline quantification shows that, all else equal, a 10-fold difference in city size generates a spatial variation of −22.13% in the average number of children born to couples aged 30 and a spatial variation of −6.07% at age 49. The narrowing of the gap suggests that the young married couples in larger cities delay childbearing.
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