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Monetary Policy and Fertility: Housing Wealth Heterogeneity Across U.S. States

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  • Richard Jaimes

    (Pontificia Universidad Javeriana)

Abstract

This paper estimates the effect of monetary policy surprises on fertility using a state-month panel of 51 U.S. states over 1990–2024. Interacting high-frequency surprises with the state homeownership rate under two-way fixed effects, I find that contrac-tionary surprises reduce birth rates significantly more in high-homeownership states: the differential is approximately 5 percent per standard deviation of exposure. The adjustable-rate mortgage origination share yields a null result, ruling out a payment adjustment channel and pointing instead to housing wealth. A parity decomposi-tion reveals that the effect is concentrated in higher-order births—approximately three times larger than for first births—indicating that existing homeowners, not prospective first-time buyers, drive the response. A semiparametric impulse response estimated at monthly horizons reveals that the fertility differential persists for at least 30 months without recovery, inconsistent with a pure conception-timing interpretation.

Suggested Citation

  • Richard Jaimes, 2026. "Monetary Policy and Fertility: Housing Wealth Heterogeneity Across U.S. States," Vniversitas Económica, Universidad Javeriana - Bogotá, vol. 26(1), pages 1-34, April.
    • Handle: RePEc:col:000416:023134
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    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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