Impacts of Housing Booms on Fertility in China: A Perspective From Homeownership

Abstract

Due to the nexus of wealth effect and cost effect, the impact of housing price on fertility is ambiguous in theory. However, the relation between housing price and fertility is essential for policymakers, especially in developing countries. This paper constructs an individual-level panel data set of over 40,000 randomly selected Chinese females with detailed fertility history during 2006–2010 from the Census 2010. Exploiting variation of housing price growth across cities over time and conditional on marriage status, we show that a 1,000 yuan upward shift in housing price induces the possibility of new birth by 13.9% for homeowners. Homeownership plays a vital role in housing price on fertility. These findings suggest that the wealth effect of housing price dominates the cost effect during the sample periods in China.

Fertility divergence across large and small areas

“…-LI and WINTERS 6 Higher housing values increase wealth for previous homeowners, which may increase their fertility, but raise the user costs of housing for future homeowners and may lower their fertility (Dettling & Kearney, 2014;Lin et al, 2016;Lovenheim & Mumford, 2013;Pan & Yang, 2022). least 35 h per week) and full-year (at least 50 weeks); young mothers' EPR is for women ages 18-60 with at least one child under age 5 at home.…”

“…6 6 Higher housing values increase wealth for previous homeowners, which may increase their fertility, but raise the user costs of housing for future homeowners and may lower their fertility (Dettling & Kearney, 2014; Lin et al., 2016; Lovenheim & Mumford, 2013; Pan & Yang, 2022). …”