This paper argues that the expectation of having to provide care for aging parents in the future may be a major factor contributing to the current low fertility rate in Japan. Using data from the 1998 and 2008 National Family Research of Japan (NFRJ) surveys and a Poisson-logit hurdle model, this paper examines whether the expectation of having to look after parents in the future affects a couple's current family planning. The first-stage model of a couple's family planning decision is a logit model which examines the decision of whether or not to have any children, and then in the second stage a Poisson model is applied to explain the number of children a couple has conditional on the couple having at least one child. The empirical evidence presented suggests that there are strong generational effects, and that for the post-war cohort, an increase in the probability of having to look after a parent increases the probability of a couple being childless.
