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Do higher rents discourage fertility? evidence from U.S. cities, 1940-2000

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  • Simon, Curtis
  • Tamura, Robert

Abstract

This paper documents the existence of a negative cross-sectional correlation between the price of living space and fertility using U.S. Census data over the period 1940-2000. This correlation is not spurious, nor does it reflect the tendency of larger families to locate within less-expensive areas of a given metropolitan area. We examine the extent to which the results reflect the sorting of married couples across metropolitan areas on desired fertility. The relationship between the unit price of living space and fertility in fact tends to be more negative for households that have moved recently. However, the probability of migration between metropolitan areas is smaller for larger families, even those originating in more expensive cities. Moreover, Durbin-Wu-Hausman tests reveal only limited evidence of endogeneity. The weaker effects of the price of living space for less mobile couples seems to be at least in part a result of their choosing to live in less-expensive portions within a given metropolitan area.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 7721.

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Date of creation: 15 Feb 2008
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Handle: RePEc:pra:mprapa:7721

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Keywords: price of space; fertility; metropolitan areas;

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  1. Haurin, Donald R & Hendershott, Patric H & Kim, Dongwook, 1993. "The Impact of Real Rents and Wages on Household Formation," The Review of Economics and Statistics, MIT Press, vol. 75(2), pages 284-93, May.
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  7. Naz, Ghazala & Nilsen, Øivind Anti & Vagstad, Steinar, 2002. "Education and completed fertility in Norway," Working Papers in Economics, University of Bergen, Department of Economics 18/02, University of Bergen, Department of Economics.
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  10. Ermisch, John, 1999. "Prices, Parents, and Young People's Household Formation," Journal of Urban Economics, Elsevier, vol. 45(1), pages 47-71, January.
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  12. Hans-Peter Kohler & Francesco C. Billari & José Antonio Ortega, 2002. "The Emergence of Lowest-Low Fertility in Europe During the 1990s," Population and Development Review, The Population Council, Inc., The Population Council, Inc., vol. 28(4), pages 641-680.
  13. Davidson, Russell & MacKinnon, James G., 1993. "Estimation and Inference in Econometrics," OUP Catalogue, Oxford University Press, Oxford University Press, number 9780195060119, October.
  14. Margo, Robert A., 1996. "The Rental Price of Housing in New York City, 1830–1860," The Journal of Economic History, Cambridge University Press, Cambridge University Press, vol. 56(03), pages 605-625, September.
  15. Francisco Covas & J.M.C. Santos Silva, 2000. "A modified hurdle model for completed fertility," Journal of Population Economics, Springer, Springer, vol. 13(2), pages 173-188.
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Cited by:
  1. Hiroshi Aiura & Yasuhiro Sato, 2009. "A model of urban demography," Discussion Papers in Economics and Business 09-18, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
  2. Tamura, Robert & Simon, Curtis & Murphy, Kevin M., 2012. "Black and White Fertility, Differential Baby Booms: The Value of Civil Rights," MPRA Paper 40921, University Library of Munich, Germany.
  3. Dan A. Black & Natalia Kolesnikova & Seth G. Sanders & Lowell J. Taylor, 2013. "Are Children “Normal”?," The Review of Economics and Statistics, MIT Press, vol. 95(1), pages 21-33, March.
  4. Dettling, Lisa J. & Kearney, Melissa S., 2014. "House prices and birth rates: The impact of the real estate market on the decision to have a baby," Journal of Public Economics, Elsevier, Elsevier, vol. 110(C), pages 82-100.
  5. Tamura, Robert & Simon, Curtis J., 2012. "Secular fertility declines, baby booms and economic growth: international evidence," MPRA Paper 41669, University Library of Munich, Germany.
  6. William A.V. Clark, 2012. "Do women delay family formation in expensive housing markets?," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 27(1), pages 1-24, July.

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