Two-Child Policy, Housing Wealth Stratification and Multi-Child Birth Rate

Abstract

This study examines the impact of housing wealth stratification on multiple-child birth rate after the implementation of universal two-child policy in China. The primary housing wealth stratification indicator used in this paper is a categorical variable representing five strata: the stratum of renter households without home ownership, denoted as NH stratum, and four strata ranked from low to high house equity, denoted as LH, SLH, SHH, HH strata. Based on this measure, our analysis of the 2018 data reveals a crowding out effect of the high housing price for the NH (renting house) stratum relative to the LH (the lowest house equity) stratum and a wealth effect in the HH (the highest house equity) stratum when the wife is highly educated. Even more interesting, we find that families in two middle housing wealth strata SLH and SHH, tended to have only one child. The above research results reflect the two impacts of housing prices on the birth rate proposed by Becker, as well as the social complexity of China's fertility culture and real estate market. These findings mainly exist in areas with strong family inheritance concepts. Additionally, the universal two-child policy can increase the multi-child birth rate, but this effect is not significantly different among different housing wealth strata. This article is a useful supplement to the literature on the relationship between the housing market and child birth rate, and also provides theoretical support for how to maintain the stability of the real estate market while solving the problem of a low child birth rate.

Keywords: Two-child policy, Housing wealth stratification, Multi-child birth rate, Crowded-out effect, Wealth effect