Do Women Delay Family Formation in Expensive Housing Markets?

PWP-CCPR-2012-010

Abstract

BACKGROUND
Recent research by demographers and economists has examined the link between living costs and fertility outcomes. The literature has provided some evidence that high rents, or high housing costs, discourage fertility.

OBJECTIVE I re-examine the hypothesis that delayed fertility (age at first birth) is related to the costs of housing measured either as rents or sales prices.

METHODS
I use data from the American Community Survey for 2006-2008 to construct mean age at first birth for women in a sample of 25 US metropolitan areas stratified by rents and sales prices. The sales prices for those metropolitan areas were from the National Association of Realtors. I use models of both aggregate relationships of mean age at first birth and metropolitan level measures and individual analyses of mean age and measures of ethnicity, education and labor force participation.

RESULTS
The effect of being in an expensive housing market delays first births by three to four years after controlling for education, ethnicity and labor market participation. However, the relatively modest fit of individual models suggest that while the housing market may play a role it is also clear that there is a complex structure to the decision making around fertility, labor force participation and housing market entry. Overall completed fertility does not appear to be changed.