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

Creina Day and Ross Guest (r.guest@griffith.edu.au)

Crawford School Research Papers from Crawford School of Public Policy, The Australian National University

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.

JEL-codes: J13 J16 R21 (search for similar items in EconPapers)
Date: 2014-01
New Economics Papers: this item is included in nep-dem and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:een:crwfrp:1401

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