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How demographic changes reshape the housing sector: Evidence from China’s labor allocation and price dynamics

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  • Yang, Xintong
  • Li, Jiao
  • Yi, Chengdong

Abstract

This paper investigates how changes in fertility and mortality rates reshape labor allocation and housing prices, addressing gaps in understanding the structural impacts beyond direct housing demand. While existing literature focuses primarily on demographic influences on housing prices, sectoral labor adjustments remain underexplored. Using panel data from 297 Chinese cities (1999–2019) and an overlapping generations model, we analyze how demographic changes affect the construction and real estate services industries. We find higher fertility rates increase employment in both industries and raise house prices, while lower mortality rates increase employment in real estate services industry. These findings reveal important structural mechanisms: fertility-driven population growth boosts new housing demand, whereas aging from lower mortality shifts labor toward real estate services. Our findings offer novel insights into the general equilibrium channels linking demographic transitions and housing markets, with implications for urban planning and labor market policies in aging economies.

Suggested Citation

  • Yang, Xintong & Li, Jiao & Yi, Chengdong, 2025. "How demographic changes reshape the housing sector: Evidence from China’s labor allocation and price dynamics," Economic Modelling, Elsevier, vol. 151(C).
    • Handle: RePEc:eee:ecmode:v:151:y:2025:i:c:s0264999325001567
    DOI: 10.1016/j.econmod.2025.107161
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    Cited by:

    1. Ren, Xianling & Qiao, Jinbao & Ji, Jianyue, 2025. "Population aging and intensified economic downside risk: Evidence from China," Economic Modelling, Elsevier, vol. 152(C).

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    Keywords

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    JEL classification:

    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • 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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