Abstract
Fertility and per capita income are now positively associated across most high income OECD countries. Low fertility and a gender wage gap persist in Japan. This paper presents a model where endogenous increases in the price of child‐care and gender equity in the allocation of capital play important roles in the effect of per capita income growth and rising female relative wages on fertility. Results indicate that a positive relationship between fertility and per capita income is not robust: overall fertility rises with female relative wages if child‐care productivity is sufficiently high; female relative wages may not rise with per capita income if men work with increasing capital relative to women.
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