Housing Effects on Childbirth and Marriage Decisions
With rising education levels, wage rates, and female labor participation rates, women today choose to either delay childbearing plans or have fewer children. The female labor participation rate has negative effects on fertility rates in many industrialized nations, particularly Western European and American countries. However, the effect is relatively weaker in East Asian economies.
In Hong Kong, Yi and Zhang (2010) showed that the female labor market activities account for only a 0.52% decline in the fertility rate. They also found that housing booms were the contributing factor to a 7.74% decline in the fertility rate. They argue for the negative income and the compensated substitution hypotheses in explaining the negative relationships between housing prices and fertility rates in Hong Kong.
The low fertility rate is a serious socio-demographic issue besetting many Asian countries, including Singapore. Singapore also faced one of the lowest total fertility rates (TFR), dipping below 1 in 2023, Minister in the Prime Minister’s Office (PMO) Indranee Rajah said in Parliament on 28 February 2024.
The rising trend of unmarried singles is also an interrelated and worrying problem that needs to be addressed head-on by society and public policymakers. My two research papers that cover the above two issues are shared below.
The first joint paper with my colleagues, Sumit Agarwal, Yi Fan, and Wenlan Qian, found strong positive correlations between new public BTO (build-to-order) flat supply and marriage rates, particularly for young people aged between 25 and 34 years. We could not rule out the effects of increasing the supply of BTO to spur people to get married. However, some media misconstrued our results by naively stating that housing led to divorces and ignoring our findings, indicating that housing-induced consumption friction was the root of the problem. Therefore, young people should be prudent not to overconsume on housing, which can cause undue financial stress.
The second paper was coauthored with two professors from Taiwan (Pei-Syuan Lin and Chin-Oh Chang from National Cheng-Chi University) using the Panel Study of Family Dynamics (PSFD) survey data in Taiwan for the periods from 1999 to 2007. We found that homeowners tend to have more babies than renters, and families living with parents and siblings would also have their first childbirth at a younger age and have more children in the fertility cycle. However, unlike the earlier studies, we did not find significant effects of housing price booms on childbirth decisions. Living close to extended families eases young families’ concerns about childrearing support and encourages them to have babies earlier. Strengthening family networks is one possible measure to improve fertility rates.
We are also working on a paper on how improving the quality of family bonding could impact fertility rates, and we will update you on the findings when they are available.
