Can education policy raise fertility in lowest-low fertility countries? A comparison of East Asia and Southern Europe

There is mixed evidence regarding the effectiveness of pro-natalist policies in developed countries (McDonald 2007), particularly in lowest-low fertility countries (including Japan, Singapore, South Korea and Taiwan in East Asia, and Italy, Spain and Portugal in Europe). Since demographic transitions were generally completed much earlier in Europe, East Asian policy responses to the problem of low fertility rates have been influenced by the European experience, even though it is unclear that this experience is relevant in the cultural, economic and social context of East Asia. In this paper, we identify a cause of low fertility that differs substantially between East Asia and Southern Europe and model the mechanisms through which fertility is affected. Specifically, we argue that differences between higher education systems in East Asia and Southern Europe lead to different incentives for investing in children’s education. We present some evidence to support the theoretical basis for our model and provide some analytical results. Finally, we identify policy solutions consistent with our model and compare their effectiveness in East Asia and Southern Europe. As noted above, our analysis focuses on differences between higher education systems in East Asia and Southern Europe, which affect incentives for investing in children’s education. In particular, we look at university admissions policies, which are subject to varying levels of government control depending on whether the institution is public or private. While there is substantial within-region variation, universities in East Asia are generally allowed to follow more restrictive admissions policies. Our analysis is based on data from the 2005-2007 REFLEX country study, which surveyed around 2,000 university graduates from each country, including Japan, Italy and Spain. The study provides information about not only respondents’ first and current jobs but also the names of the educational institutions attended. We match these institutions to their performance in various rankings, including the influential 2005 QS World University Rankings, the 2009 QS Asian University Rankings and national media rankings.