Short-Term Effects of House Prices on Birth Rates

EBRD, Working Paper No. 192

46 Pages Posted: 2 Oct 2016

See all articles by Cevat Giray Aksoy

Cevat Giray Aksoy

European Bank for Reconstruction and Development; King’s College London; IZA Institute of Labor Economics

Date Written: September 2016


This paper explores the effects of house prices on fertility rates using a new instrumental variable strategy, exploiting exogenous variation in house prices induced by planning restrictions. Using data from English counties, the instrumental variable estimates indicate that: A 10 per cent increase in house prices leads to a 2.8 per cent increase in births among owners and a 4.9 per cent decrease in births among renters. Once calculated at the mean home ownership rate the net effect is a 1.3 per cent fall in birth rates. In addition, I document that the positive home owners effect is primarily driven by the older cohort and the negative price effect among renters is mainly driven by those aged 20-29. A further assessment of house prices and fertility nexus reveals that these effects vary by region and demographic subgroup. Taken together, the results imply that local real estate market conditions may potentially change the age structure and population dynamics of a country, including many emerging markets and transition countries.

Keywords: house prices, birth rates, rents, home equity

JEL Classification: J13, R21, R23

Suggested Citation

Aksoy, Cevat Giray, Short-Term Effects of House Prices on Birth Rates (September 2016). EBRD, Working Paper No. 192, Available at SSRN: or

Cevat Giray Aksoy (Contact Author)

European Bank for Reconstruction and Development ( email )

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London EC2A 2JN
United Kingdom

King’s College London ( email )

London, WC2A 2AE
United Kingdom

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072

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