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Do Family Wealth Shocks Affect Fertility Choices? Evidence from the Housing Market

Author

Listed:
  • Michael F. Lovenheim

    (Cornell University)

  • Kevin J. Mumford

    (Purdue University)

Abstract

This paper uses wealth changes driven by housing market variation to estimate the effect of family resources on fertility decisions. Using data from the Panel Study of Income Dynamics, we show that a $100,000 increase in housing wealth among home owners causes a 16% to 18% increase in the probability of having a child. There is no evidence of an effect of MSA-level housing price growth on the fertility of renters, however. We also present evidence that housing wealth growth increases total fertility and that the responsiveness of fertility to housing wealth has increased over time, commensurate with the recent housing boom. © 2013 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Suggested Citation

  • 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.
  • Handle: RePEc:tpr:restat:v:95:y:2013:i:2:p:464-475
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    Keywords

    wealth shocks; fertility; income; wealth increases;

    JEL classification:

    • 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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