Housing wealth and fertility: evidence from China

This study examines how an increase in home value affects fertility decisions of homeowners in China by exploiting regional heterogeneity in housing markets driven by local regulatory and geographic land constraints. In sharp contrast to the literature on developed countries, our instrumental variable results show a negative fertility response to house value growth driven by the recent housing boom in China, where a 100,000-yuan increase in lagged home values—about 43% of the average housing wealth at baseline—results in a 14% decrease in the likelihood of home-owning women giving birth. Further evidence suggests that underdeveloped credit markets may suppress the positive wealth effect of house value growth on childbearing.