IDEAS home Printed from https://ideas.repec.org/a/eee/juecon/v150y2025ics0094119025000774.html

Impact of fertility relaxation on the housing market outcomes

Author

Listed:
  • Li, Keyang
  • Tang, Yixun
  • Wang, Qiuyi

Abstract

Using an administrative microlevel dataset of housing resale transactions in a major Chinese city, we exploit China's relaxation of the One-Child Policy in 2013 as an exogenous shock on fertility to analyze the effect of fertility relaxation on housing market outcomes. Our results show that housing prices (transaction volume) for units with more bedrooms increased by 2.2% (9.9%) compared with those with fewer bedrooms after the policy announcement. Consistently, city-level analysis employing an alternative identification strategy reveals that cities experiencing greater exposure to the policy change exhibited more pronounced increases in housing prices after the fertility relaxation. The underlying mechanism is related to increased fertility, as the surge in housing demand for units with more bedrooms was primarily driven by younger buyers aged 18–29 with higher fertility intentions. Our findings reveal the consequences of fertility relaxation on the housing market, which have important implications for fertility and housing policy development.

Suggested Citation

  • Li, Keyang & Tang, Yixun & Wang, Qiuyi, 2025. "Impact of fertility relaxation on the housing market outcomes," Journal of Urban Economics, Elsevier, vol. 150(C).
    • Handle: RePEc:eee:juecon:v:150:y:2025:i:c:s0094119025000774
    DOI: 10.1016/j.jue.2025.103812
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0094119025000774
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jue.2025.103812?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Rosenzweig, Mark R & Wolpin, Kenneth I, 1980. "Life-Cycle Labor Supply and Fertility: Causal Inferences from Household Models," Journal of Political Economy, University of Chicago Press, vol. 88(2), pages 328-348, April.
    2. Becker, Gary S & Tomes, Nigel, 1976. "Child Endowments and the Quantity and Quality of Children," Journal of Political Economy, University of Chicago Press, vol. 84(4), pages 143-162, August.
    3. Chen, Yi & Fang, Hanming, 2021. "The long-term consequences of China's “Later, Longer, Fewer” campaign in old age," Journal of Development Economics, Elsevier, vol. 151(C).
    4. Mark R. Rosenzweig & Junsen Zhang, 2009. "Do Population Control Policies Induce More Human Capital Investment? Twins, Birth Weight and China's "One-Child" Policy," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 76(3), pages 1149-1174.
    5. Qin, Xuezheng & Zhuang, Castiel Chen & Yang, Rudai, 2017. "Does the one-child policy improve children's human capital in urban China? A regression discontinuity design," Journal of Comparative Economics, Elsevier, vol. 45(2), pages 287-303.
    6. Agarwal, Sumit & Li, Keyang & Qin, Yu & Wu, Jing & Yan, Jubo, 2020. "Tax evasion, capital gains taxes, and the housing market," Journal of Public Economics, Elsevier, vol. 188(C).
    7. Gary S. Becker & H. Gregg Lewis, 1974. "Interaction between Quantity and Quality of Children," NBER Chapters, in: Economics of the Family: Marriage, Children, and Human Capital, pages 81-90, National Bureau of Economic Research, Inc.
    8. 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, vol. 110(C), pages 82-100.
    9. Michael F. Lovenheim & Kevin J. Mumford, 2013. "Do Family Wealth Shocks Affect Fertility Choices? Evidence from the Housing Market," The Review of Economics and Statistics, MIT Press, vol. 95(2), pages 464-475, May.
    10. Quamrul H. Ashraf & David N. Weil & Joshua Wilde, 2013. "The Effect of Fertility Reduction on Economic Growth," Population and Development Review, The Population Council, Inc., vol. 39(1), pages 97-130, March.
    11. Qin, Yu & Wu, Jing & Yan, Jubo, 2019. "Negotiating housing deal on a polluted day: Consequences and possible explanations," Journal of Environmental Economics and Management, Elsevier, vol. 94(C), pages 161-187.
    12. Claudia Goldin, 2006. "The Quiet Revolution That Transformed Women's Employment, Education, and Family," American Economic Review, American Economic Association, vol. 96(2), pages 1-21, May.
    13. Haoming Liu, 2014. "The quality–quantity trade-off: evidence from the relaxation of China’s one-child policy," Journal of Population Economics, Springer;European Society for Population Economics, vol. 27(2), pages 565-602, April.
    14. Wei, Shang-Jin & Zhang, Xiaobo & Liu, Yin, 2017. "Home ownership as status competition: Some theory and evidence," Journal of Development Economics, Elsevier, vol. 127(C), pages 169-186.
    15. Peng, Ying & Tian, Chuanhao & Wen, Haizhen, 2021. "How does school district adjustment affect housing prices: An empirical investigation from Hangzhou, China," China Economic Review, Elsevier, vol. 69(C).
    16. C. Y. Cyrus Chu & Jou-Chun Lin & Wen-Jen Tsay, 2020. "Males’ housing wealth and their marriage market advantage," Journal of Population Economics, Springer;European Society for Population Economics, vol. 33(3), pages 1005-1023, July.
    17. Gong, Yifan & Yao, Yuxi, 2022. "Demographic changes and the housing market," Regional Science and Urban Economics, Elsevier, vol. 95(C).
    18. Schultz, T Paul & Zeng, Yi, 1995. "Fertility of Rural China: Effects of Local Family Planning and Health Programs," Journal of Population Economics, Springer;European Society for Population Economics, vol. 8(4), pages 329-350, November.
    19. Hill Kulu & Andres Vikat, 2007. "Fertility differences by housing type: an effect of housing conditions or of selective moves?," MPIDR Working Papers WP-2007-014, Max Planck Institute for Demographic Research, Rostock, Germany.
    20. Huang, Bin & He, Xiaoyan & Xu, Lei & Zhu, Yu, 2020. "Elite School Designation and Housing Prices: Quasi-Experimental Evidence from Beijing, China," IZA Discussion Papers 12897, IZA Network @ LISER.
    21. Rosenzweig, Mark R & Wolpin, Kenneth I, 1980. "Testing the Quantity-Quality Fertility Model: The Use of Twins as a Natural Experiment," Econometrica, Econometric Society, vol. 48(1), pages 227-240, January.
    22. Feng, Hao & Lu, Ming, 2013. "School quality and housing prices: Empirical evidence from a natural experiment in Shanghai, China," Journal of Housing Economics, Elsevier, vol. 22(4), pages 291-307.
    23. David S. Lee, 2009. "Training, Wages, and Sample Selection: Estimating Sharp Bounds on Treatment Effects," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 76(3), pages 1071-1102.
    24. Lien, Hsien-Ming & Wu, Wen-Chieh & Lin, Chu-Chia, 2008. "New evidence on the link between housing environment and children's educational attainments," Journal of Urban Economics, Elsevier, vol. 64(2), pages 408-421, September.
    25. A. Colin Cameron & Douglas L. Miller, 2015. "A Practitioner’s Guide to Cluster-Robust Inference," Journal of Human Resources, University of Wisconsin Press, vol. 50(2), pages 317-372.
    26. Lei An & Yu Qin & Jing Wu & Wei You, 2024. "The Local Labor Market Effect of Relaxing Internal Migration Restrictions: Evidence from China," Journal of Labor Economics, University of Chicago Press, vol. 42(1), pages 161-200.
    27. Wu, Jing & Gyourko, Joseph & Deng, Yongheng, 2012. "Evaluating conditions in major Chinese housing markets," Regional Science and Urban Economics, Elsevier, vol. 42(3), pages 531-543.
    28. Dennis Tao Yang & Marjorie McElroy, 2000. "Carrots and Sticks: Fertility Effects of China's Population Policies," American Economic Review, American Economic Association, vol. 90(2), pages 389-392, May.
    29. Yuyu Chen & Hongbin Li & Lingsheng Meng, 2013. "Prenatal Sex Selection and Missing Girls in China: Evidence from the Diffusion of Diagnostic Ultrasound," Journal of Human Resources, University of Wisconsin Press, vol. 48(1), pages 36-70.
    30. Hongbin Li & Junsen Zhang, 2007. "Do High Birth Rates Hamper Economic Growth?," The Review of Economics and Statistics, MIT Press, vol. 89(1), pages 110-117, February.
    31. Daniel Aaronson & Rajeev Dehejia & Andrew Jordan & Cristian Pop-Eleches & Cyrus Samii & Karl Schulze, 2021. "The Effect of Fertility on Mothers’ Labor Supply over the Last Two Centuries [Semiparametric instrumental variables estimation of treatment response models]," The Economic Journal, Royal Economic Society, vol. 131(633), pages 1-32.
    32. Junsen Zhang, 2017. "The Evolution of China's One-Child Policy and Its Effects on Family Outcomes," Journal of Economic Perspectives, American Economic Association, vol. 31(1), pages 141-160, Winter.
    33. Wu, Xiaoyu, 2022. "Fertility and maternal labor supply: Evidence from the new two-child policies in urban China," Journal of Comparative Economics, Elsevier, vol. 50(2), pages 584-598.
    34. Ang, Geer & Tan, Ya & Zhai, Yingjia & Zhang, Fan & Zhang, Qinghua, 2024. "Housing wealth, fertility and children's health in China: A regression discontinuity design," Journal of Health Economics, Elsevier, vol. 97(C).
    35. Barro, Robert J & Becker, Gary S, 1989. "Fertility Choice in a Model of Economic Growth," Econometrica, Econometric Society, vol. 57(2), pages 481-501, March.
    36. Fei Wang & Liqiu Zhao & Zhong Zhao, 2017. "China’s family planning policies and their labor market consequences," Journal of Population Economics, Springer;European Society for Population Economics, vol. 30(1), pages 31-68, January.
    37. Avraham Ebenstein, 2010. "The "Missing Girls" of China and the Unintended Consequences of the One Child Policy," Journal of Human Resources, University of Wisconsin Press, vol. 45(1).
    38. Li, Keyang & Wu, Jing & Xing, Jianwei & Yan, Jubo, 2023. "Steering in the housing market: Incentive induced by the tax scheme," Regional Science and Urban Economics, Elsevier, vol. 103(C).
    39. Li Gan & Zhichao Yin & Jijun Tan, 2016. "Report on the Development of Household Finance in Rural China (2014)," Springer Books, Springer, edition 1, number 978-981-10-0409-4, January.
    40. Haoran He & Sherry Xin Li & Yuling Han, 2023. "Labor Market Discrimination against Family Responsibilities: A Correspondence Study with Policy Change in China," Journal of Labor Economics, University of Chicago Press, vol. 41(2), pages 361-387.
    41. Li, Hongbin & Yi, Junjian & Zhang, Junsen, 2015. "Fertility, Household Structure, and Parental Labor Supply: Evidence from Rural China," IZA Discussion Papers 9342, IZA Network @ LISER.
    42. Sergi Vidal & Johannes Huinink & Michael Feldhaus, 2017. "Fertility Intentions and Residential Relocations," Demography, Springer;Population Association of America (PAA), vol. 54(4), pages 1305-1330, August.
    43. Jing Wu & Yongheng Deng & Hongyu Liu, 2014. "House Price Index Construction in the Nascent Housing Market: The Case of China," The Journal of Real Estate Finance and Economics, Springer, vol. 48(3), pages 522-545, April.
    44. Luc Laeven & Alexander Popov, 2017. "Waking Up from the American Dream: On the Experience of Young Americans during the Housing Boom of the 2000s," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 49(5), pages 861-895, August.
    45. Wei Huang & Xiaoyan Lei & Ang Sun, 2021. "Fertility Restrictions and Life Cycle Outcomes: Evidence from the One-Child Policy in China," The Review of Economics and Statistics, MIT Press, vol. 103(4), pages 694-710, October.
    46. Lu Fang & Lingxiao Li & Abdullah Yavas, 2023. "The Impact of Distant Hurricane on Local Housing Markets," The Journal of Real Estate Finance and Economics, Springer, vol. 66(2), pages 327-372, February.
    47. İmrohoroğlu, Ayşe & Zhao, Kai, 2018. "The chinese saving rate: Long-term care risks, family insurance, and demographics," Journal of Monetary Economics, Elsevier, vol. 96(C), pages 33-52.
    48. Schwartz, Amy Ellen & Ellen, Ingrid Gould & Voicu, Ioan & Schill, Michael H., 2006. "The external effects of place-based subsidized housing," Regional Science and Urban Economics, Elsevier, vol. 36(6), pages 679-707, November.
    49. Wrenn, Douglas H. & Yi, Junjian & Zhang, Bo, 2019. "House prices and marriage entry in China," Regional Science and Urban Economics, Elsevier, vol. 74(C), pages 118-130.
    50. Leonard M. Lopoo & Andrew S. London, 2016. "Household Crowding During Childhood and Long-Term Education Outcomes," Demography, Springer;Population Association of America (PAA), vol. 53(3), pages 699-721, June.
    51. Mankiw, N. Gregory & Weil, David N., 1989. "The baby boom, the baby bust, and the housing market," Regional Science and Urban Economics, Elsevier, vol. 19(2), pages 235-258, May.
    52. Xiaobo He & Rong Zhu, 2016. "Fertility and Female Labour Force Participation: Causal Evidence from Urban China," Manchester School, University of Manchester, vol. 84(5), pages 664-674, September.
    53. Carrasco, Raquel, 2001. "Binary Choice with Binary Endogenous Regressors in Panel Data: Estimating the Effect of Fertility on Female Labor Participation," Journal of Business & Economic Statistics, American Statistical Association, vol. 19(4), pages 385-394, October.
    54. Bakshi, Gurdip S & Chen, Zhiwu, 1994. "Baby Boom, Population Aging, and Capital Markets," The Journal of Business, University of Chicago Press, vol. 67(2), pages 165-202, April.
    55. Huang, Bin & He, Xiaoyan & Xu, Lei & Zhu, Yu, 2020. "Elite school designation and housing prices-quasi-experimental evidence from Beijing, China✰," Journal of Housing Economics, Elsevier, vol. 50(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hu, Peinan & Gao, Xuwen & Huangfu, Bingyu, 2025. "Fertility restriction, human capital investment and gender equality: Evidence from the one-child policy in China," Journal of Economic Behavior & Organization, Elsevier, vol. 240(C).
    2. Meng, Lina & Peng, Lu & Zhou, Yinggang, 2023. "Do housing booms reduce fertility intentions? Evidence from the new two-child policy in China," Regional Science and Urban Economics, Elsevier, vol. 101(C).
    3. Nana Chen & Yi Min & Hangtian Xu & Shuhan Chen, 2025. "The differential effects of childbearing on household economic decisions: The contrast between the first and second child," Asian Economic Journal, East Asian Economic Association, vol. 39(1), pages 23-48, March.
    4. Fei Wang & Liqiu Zhao & Zhong Zhao, 2017. "China’s family planning policies and their labor market consequences," Journal of Population Economics, Springer;European Society for Population Economics, vol. 30(1), pages 31-68, January.
    5. Xu, Yuanwei & Wang, Feicheng, 2022. "The health consequence of rising housing prices in China," Journal of Economic Behavior & Organization, Elsevier, vol. 200(C), pages 114-137.
    6. Hong Liu & Lili Liu & Fei Wang, 2023. "Housing wealth and fertility: evidence from China," Journal of Population Economics, Springer;European Society for Population Economics, vol. 36(1), pages 359-395, January.
    7. Yi Chen & Yingfei Huang, 2020. "The power of the government: China's Family Planning Leading Group and the fertility decline of the 1970s," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 42(35), pages 985-1038.
    8. Li, Bingjing & Zhang, Hongliang, 2017. "Does population control lead to better child quality? Evidence from China’s one-child policy enforcement," Journal of Comparative Economics, Elsevier, vol. 45(2), pages 246-260.
    9. Xiaoyu Wu & Jianmei Zhao, 2020. "Risk sharing, siblings, and household equity investment: evidence from urban China," Journal of Population Economics, Springer;European Society for Population Economics, vol. 33(2), pages 461-482, April.
    10. Li, Honghui & Hiwatari, Masato, 2020. "Family Size and Educational Attainment : The Case of China," Discussion paper series. A 353, Graduate School of Economics and Business Administration, Hokkaido University.
    11. Ang, Geer & Tan, Ya & Zhai, Yingjia & Zhang, Fan & Zhang, Qinghua, 2024. "Housing wealth, fertility and children's health in China: A regression discontinuity design," Journal of Health Economics, Elsevier, vol. 97(C).
    12. Anh P. Ngo, 2020. "Effects of Vietnam’s two-child policy on fertility, son preference, and female labor supply," Journal of Population Economics, Springer;European Society for Population Economics, vol. 33(3), pages 751-794, July.
    13. Damian Clarke, 2018. "Children And Their Parents: A Review Of Fertility And Causality," Journal of Economic Surveys, Wiley Blackwell, vol. 32(2), pages 518-540, April.
    14. Xiaoyu Wu & Lixing Li, 2012. "Family size and maternal health: evidence from the One-Child policy in China," Journal of Population Economics, Springer;European Society for Population Economics, vol. 25(4), pages 1341-1364, October.
    15. Rao, Ziwei, 2021. "Do children prevent their poor old parents from working?," VfS Annual Conference 2021 (Virtual Conference): Climate Economics 242424, Verein für Socialpolitik / German Economic Association.
    16. Jaqueline Oliveira, 2019. "Birth order and the gender gap in educational attainment," Review of Economics of the Household, Springer, vol. 17(3), pages 775-803, September.
    17. Jia, Nan & Zhou, Ying & Yang, Tianchi, 2021. "“Selective two-child” policy and household resource allocation," China Economic Review, Elsevier, vol. 68(C).
    18. Jianmei ZHAO & Hai ZHONG, 2019. "A Demographic Factor as a Determinant of Migration: What Is the Effect of Sibship Size on Migration Decision?," JODE - Journal of Demographic Economics, Cambridge University Press, vol. 85(4), pages 321-345, December.
    19. Chen, Yi & Fang, Hanming, 2021. "The long-term consequences of China's “Later, Longer, Fewer” campaign in old age," Journal of Development Economics, Elsevier, vol. 151(C).
    20. Rao, Ziwei & Zhang, Yi, 2024. "Rely on children or work longer? The impact of fertility and child gender on old-age labor supply," World Development, Elsevier, vol. 181(C).

    More about this item

    Keywords

    ;
    ;
    ;

    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:juecon:v:150:y:2025:i:c:s0094119025000774. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/622905 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.