Do Credit Supply Shocks Affect Fertility Choices?

16 Pages Posted: 24 Jan 2021 Last revised: 25 Feb 2022

See all articles by Jeong Ho (John) Kim

Jeong Ho (John) Kim

Florida State University - Department of Finance

Heebum Lee

New York University (NYU) - Department of Finance

Sung Kwan Lee

Chinese University of Hong Kong, Shenzhen

Date Written: February 23, 2022

Abstract

We empirically investigate the role of credit supply in fertility decisions. Using the U.S. banking deregulation in the 1980s and the 2007–2009 Great Recession as two different laboratories for credit supply shocks, we find that an increase in credit supply consistently implies higher fertility rates, as well as higher propensity to have a child. This relation, which is economically and statistically significant, differs across individuals: It is more pronounced for young women and for families with unemployed husbands. Finally, we provide suggestive evidence that increased credit access leads to more optimistic expectations about personal prospects, and in turn, higher fertility rates.

Keywords: Credit Supply, Fertility Choices, Family Economics, Banking Deregulation, Great Recession

JEL Classification: E51, J13, D10, G20, G01

Suggested Citation

Kim, Jeong Ho and Lee, Heebum and Lee, Sung Kwan, Do Credit Supply Shocks Affect Fertility Choices? (February 23, 2022). Available at SSRN: https://ssrn.com/abstract=3740323 or http://dx.doi.org/10.2139/ssrn.3740323

Jeong Ho Kim (Contact Author)

Florida State University - Department of Finance ( email )

Tallahassee, FL 32306-1042
United States

Heebum Lee

New York University (NYU) - Department of Finance ( email )

Stern School of Business
44 West 4th Street
New York, NY 10012-1126
United States

Sung Kwan Lee

Chinese University of Hong Kong, Shenzhen ( email )

2001 Longxiang Road
Longgang District
Shenzhen, Guangdong
China

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