The causality between fertility and female labour force participation in Japan

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Abstract
Applying Hsiao's version of the Granger causality method, an examination is carried out into the causality between fertility (BR) and female labour (FR) participation for Japan over the period 1950–1993. A unidirectional causality appears to run from BR to FR without feedback. The F-statistics show that fertility negatively affects female labour force participation but not vice versa. It appears that women's employment does not hinder the probability of having more children, but having small children at home strongly discourages them from seeking outside employment.