The Effect of Gender Wages and Working Age Populations on Fertility and House Prices

19 Pages Posted: 1 Feb 2014

See all articles by Creina Day

Creina Day

Australian National University

Ross S. Guest

Griffith University - School of Accounting and Finance - Gold Coast Campus

Date Written: January 1, 2014

Abstract

"This paper presents an intertemporal model of household choice where endogenous increases" in house prices play an important role in the effect of rising female relative wages on fertility. Households save for a deposit in young age, rear children and repay mortgages in middle age and sell housing in retirement. House prices are determined by a market for housing. The outcome from this model is that fertility: i. increases as female wages rise relative to male wages provided the price elasticity in housing supply is sufficiently high; ii. declines as female relative wages rise if housing supply is fixed; iii. declines as the working age to old age population ratio increases provided the housing supply price elasticity is less than the inverse of elasticity of house prices with respect to the support ratio. These results reconcile recent observations that fertility rebounds with rising house prices and female relative wages in several high income economies, but continues to decline in others and provide a novel mechanism whereby past demographic change impacts current fertility through house prices.

Keywords: Fertility, house prices, gender wages, population, housing supply price elasticity

JEL Classification: J13, J16, R21

Suggested Citation

Day, Creina and Guest, Ross, The Effect of Gender Wages and Working Age Populations on Fertility and House Prices (January 1, 2014). Crawford School Research Paper No. 14-01. Available at SSRN: https://ssrn.com/abstract=2388449 or http://dx.doi.org/10.2139/ssrn.2388449

Creina Day

Australian National University ( email )

7 Liversidge Street
Lennox Crossing
Canberra, ACT 0200
Australia

Ross Guest (Contact Author)

Griffith University - School of Accounting and Finance - Gold Coast Campus ( email )

PMB 50 Gold Coast Mail Centre
9726 Queensland
Australia

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