House prices and fertility in England and Wales

Traditionally the relationship between the cost of housing and fertility has been assumed to be negative: high relative house prices deter the moves into home ownership or into larger dwellings deemed necessary by many for raising children. However, recent research from the US challenges this view by emphasizing the wealth effects of increasing home values among owners. This paper examines the relationship between short-run fluctuations in local area house prices and fertility in England and Wales between 1995 and 2008, using individual-level data from a household panel merged to area-level data on house prices. Innovations relative to previous work are a focus on the precise timing of the relationship between housing market conditions and fertility responses and a systematic analysis of the differential effects of house price levels and changes. The results suggest house price effects vary considerably for different groups and point to the importance of the national contexts.