IDEAS home Printed from https://ideas.repec.org/p/cbt/econwp/16-23.html
   My bibliography  Save this paper

The Effect of House Prices on Fertility: Evidence from Canada

Author

Abstract

The price of housing is an important and under-studied candidate for consideration in fertility decisions. Theoretically, higher housing prices will cause renters to have fewer additional children, and home owners to have more children if they already have sufficient housing and low substitution between children and other “goods”, and fewer children otherwise. In this paper, we combine longitudinal data from the Canadian Survey of Labour Income and Dynamics (SLID) and housing price data from the Canadian Real Estate Association to estimate the effect of housing price on fertility. We follow non-moving women aged 18-40 (with their associated families) over time to ask whether changes in lagged housing price affects marginal or total fertility. For home owners, we find that lagged housing prices are positively associated with marginal fertility using pooled cross section or fixed effects, negatively associated with total fertility under pooled cross section, but positively associated using fixed effects. For renters, lagged housing prices are not significantly negatively associated with either total or marginal fertility measures.

Suggested Citation

  • Jeremy Clark & Ana Ferrer, 2016. "The Effect of House Prices on Fertility: Evidence from Canada," Working Papers in Economics 16/23, University of Canterbury, Department of Economics and Finance.
    • Handle: RePEc:cbt:econwp:16/23
    as

    Download full text from publisher

    File URL: https://repec.canterbury.ac.nz/cbt/econwp/1623.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Currie, Janet & Rossin-Slater, Maya, 2013. "Weathering the storm: Hurricanes and birth outcomes," Journal of Health Economics, Elsevier, vol. 32(3), pages 487-503.
    2. Maria Chiuri & Tullio Jappelli, 2010. "Do the elderly reduce housing equity? An international comparison," Journal of Population Economics, Springer;European Society for Population Economics, vol. 23(2), pages 643-663, March.
    3. 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.
    4. Jeannine Bailliu & Katya Kartashova & Césaire Meh, 2011. "Household Borrowing and Spending in Canada," Bank of Canada Review, Bank of Canada, vol. 2011(Winter), pages 16-29.
    5. James Feyrer & Bruce Sacerdote & Ariel Dora Stern, 2008. "Will the Stork Return to Europe and Japan? Understanding Fertility within Developed Nations," Journal of Economic Perspectives, American Economic Association, vol. 22(3), pages 3-22, Summer.
    6. Kostas Tsatsaronis & Haibin Zhu, 2004. "What drives housing price dynamics: cross-country evidence," BIS Quarterly Review, Bank for International Settlements, March.
    7. John M. Clapp & Stephen L. Ross, 2004. "Schools and Housing Markets: An Examination of School Segregation and Performance in Connecticut," Economic Journal, Royal Economic Society, vol. 114(499), pages 425-440, November.
    8. Atalay, Kadir & Li, Ang & Whelan, Stephen, 2017. "Housing Wealth and Fertility: Australian Evidence," Working Papers 2017-08, University of Sydney, School of Economics.
    9. Simon, Curtis J. & Tamura, Robert, 2009. "Do higher rents discourage fertility? Evidence from U.S. cities, 1940-2000," Regional Science and Urban Economics, Elsevier, vol. 39(1), pages 33-42, January.
    10. Gianna Claudia Giannelli & Chiara Monfardini, 2003. "Joint decisions on household membership and human capital accumulation of youths. The role of expected earnings and local markets," Journal of Population Economics, Springer;European Society for Population Economics, vol. 16(2), pages 265-285, May.
    11. Glaeser, Edward L & Mare, David C, 2001. "Cities and Skills," Journal of Labor Economics, University of Chicago Press, vol. 19(2), pages 316-342, April.
    12. Richard K. Green & Susan M. Wachter, 2005. "The American Mortgage in Historical and International Context," Journal of Economic Perspectives, American Economic Association, vol. 19(4), pages 93-114, Fall.
    13. Alicia Adsera, 2011. "Where Are the Babies? Labor Market Conditions and Fertility in Europe [Où sont les bébés ? Conditions du marché du travail et fécondité en Europe]," European Journal of Population, Springer;European Association for Population Studies, vol. 27(1), pages 1-32, February.
    14. 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.
    15. Alicia Adsera & Ana Ferrer, 2014. "Factors influencing the fertility choices of child immigrants in Canada," Population Studies, Taylor & Francis Journals, vol. 68(1), pages 65-79, March.
    16. Martin Farnham & Lucie Schmidt & Purvi Sevak, 2011. "House Prices and Marital Stability," American Economic Review, American Economic Association, vol. 101(3), pages 615-619, May.
    17. Marah Curtis & Jane Waldfogel, 2009. "Fertility Timing of Unmarried and Married Mothers: Evidence on Variation Across U.S. Cities from the Fragile Families and Child Wellbeing Study," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 28(5), pages 569-588, October.
    18. Borsch-Supan, Axel, 1986. "Household formation, housing prices, and public policy impacts," Journal of Public Economics, Elsevier, vol. 30(2), pages 145-164, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. 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.
    2. Atalay, Kadir & Li, Ang & Whelan, Stephen, 2021. "Housing wealth, fertility intentions and fertility," Journal of Housing Economics, Elsevier, vol. 54(C).
    3. Daysal, N. Meltem & Lovenheim, Michael & Siersbæk, Nikolaj & Wasser, David N., 2021. "Home prices, fertility, and early-life health outcomes," Journal of Public Economics, Elsevier, vol. 198(C).
    4. Irakli Japaridze & Nagham Sayour, 2024. "Housing Affordability Crisis and Delayed Fertility: Evidence from the USA," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 43(2), pages 1-34, April.
    5. Philipp M. Lersch & Emanuela Struffolino & Agnese Vitali, 2022. "Wealth in Couples: Introduction to the Special Issue," European Journal of Population, Springer;European Association for Population Studies, vol. 38(4), pages 623-641, October.
    6. William A. V. Clark & Daichun Yi & Xin Zhang, 2020. "Do House Prices Affect Fertility Behavior in China? An Empirical Examination," International Regional Science Review, , vol. 43(5), pages 423-449, September.
    7. Beatrice D. Simo-Kengne & Lumengo Bonga-Bonga, 2020. "House prices and fertility in South Africa: A spatial econometric analysis," Economics Bulletin, AccessEcon, vol. 40(4), pages 3193-3210.
    8. Awaworyi Churchill, Sefa & Smyth, Russell & Trinh, Trong-Anh & Yew, Siew Ling, 2022. "Local crime and fertility," Journal of Economic Behavior & Organization, Elsevier, vol. 200(C), pages 312-331.

    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. Ana Ferrer & Jeremy Clark, 2016. "The Effect of Housing Price Changes on Fertility: Evidence from Canada," Working Papers 1603, University of Waterloo, Department of Economics, revised Sep 2016.
    2. Mimi Liu & Jeremy Clark, 2017. "The effect of the price or rental cost of housing on family size: a theoretical analysis with reference to New Zealand," New Zealand Economic Papers, Taylor & Francis Journals, vol. 51(3), pages 281-301, September.
    3. William A. V. Clark & Daichun Yi & Xin Zhang, 2020. "Do House Prices Affect Fertility Behavior in China? An Empirical Examination," International Regional Science Review, , vol. 43(5), pages 423-449, September.
    4. Atalay, Kadir & Li, Ang & Whelan, Stephen, 2021. "Housing wealth, fertility intentions and fertility," Journal of Housing Economics, Elsevier, vol. 54(C).
    5. Enström Öst, Cecilia & Wilhelmsson, Mats, 2019. "The long-term consequences of youth housing for childbearing and higher education," Journal of Policy Modeling, Elsevier, vol. 41(5), pages 845-858.
    6. Luc Laeven & Alexander Popov, 2016. "A Lost Generation? Education Decisions and Employment Outcomes during the US Housing Boom-Bust Cycle of the 2000s," American Economic Review, American Economic Association, vol. 106(5), pages 630-635, May.
    7. Day, Creina & Guest, Ross, 2016. "Fertility and female wages: A new link via house prices," Economic Modelling, Elsevier, vol. 53(C), pages 121-132.
    8. Wen-Yi Chen, 2013. "Does Housing Cost Affect Birth Rates in Taiwan? The ADL Test for Threshold Co-integration," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(3), pages 90-103, October.
    9. Richard Disney & John Gathergood, 2018. "House Prices, Wealth Effects and Labour Supply," Economica, London School of Economics and Political Science, vol. 85(339), pages 449-478, July.
    10. Liepmann, Hannah, 2018. "The impact of a negative labor demand shock on fertility – Evidence from the fall of the Berlin Wall," Labour Economics, Elsevier, vol. 54(C), pages 210-224.
    11. Cobb-Clark, Deborah A., 2008. "Leaving Home: What Economics Has to Say about the Living Arrangements of Young Australians," IZA Discussion Papers 3309, Institute of Labor Economics (IZA).
    12. 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.
    13. XXX, Shuya & Iwata, Shinichiro, 2012. "Fertility and the user cost of home ownership: Evidence from regional panel data," MPRA Paper 37387, University Library of Munich, Germany.
    14. Atalay, Kadir & Edwards, Rebecca, 2022. "House prices, housing wealth and financial well-being," Journal of Urban Economics, Elsevier, vol. 129(C).
    15. Simon, Curtis J. & Tamura, Robert, 2009. "Do higher rents discourage fertility? Evidence from U.S. cities, 1940-2000," Regional Science and Urban Economics, Elsevier, vol. 39(1), pages 33-42, January.
    16. Frederic S. Mishkin, 2007. "Housing and the monetary transmission mechanism," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 359-413.
    17. Kasey Buckles & Daniel Hungerman & Steven Lugauer, 2021. "Is Fertility a Leading Economic Indicator?," The Economic Journal, Royal Economic Society, vol. 131(634), pages 541-565.
    18. Alla Koblyakova & Michael White, 2017. "Supply driven mortgage choice," Urban Studies, Urban Studies Journal Limited, vol. 54(5), pages 1194-1210, April.
    19. Xiandeng Jiang & Zheng Pan & Ningru Zhao, 2023. "Relative Value vs Absolute Value: Housing Wealth and Labor Supply," The Journal of Real Estate Finance and Economics, Springer, vol. 66(1), pages 41-76, January.
    20. Kristen Harknett & Francesco Billari & Carla Medalia, 2014. "Do Family Support Environments Influence Fertility? Evidence from 20 European Countries," European Journal of Population, Springer;European Association for Population Studies, vol. 30(1), pages 1-33, February.

    More about this item

    Keywords

    Economic Determinants of Fertility; Housing Prices; Wealth Effects; Home Ownership;
    All these keywords.

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • 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

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:cbt:econwp:16/23. 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: Albert Yee (email available below). General contact details of provider: https://edirc.repec.org/data/decannz.html .

    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.