High Rents, Low Births: Exploring Fertility Responses to Housing Prices Via Ardl

Abstract

China experienced rapid population growth throughout the 1990s, but this trend began to stabilize by 2015. By 2017, the number of births had fallen below the number of deaths, marking the onset of negative population growth. This demographic shift presents significant macroeconomic challenges, including labor shortages and an increasing burden of elderly care. While fertility rates have declined, household consumption levels have continued to rise, with housing expenditures surpassing food to become the largest component of per capita spending. This study investigates whether rising housing prices have contributed to declining fertility rates in China. Using panel data from 31 provinces between 2003 and 2021, the analysis employs the Autoregressive Distributed Lag (ARDL) model to examine the relationship between housing prices and fertility. The findings indicate that both increasing housing prices and the growth of the tertiary sector’s GDP exert a significant negative impact on fertility rates. Based on these results, the study recommends that policymakers consider measures to regulate housing prices and manage consumption growth as part of broader efforts to address the challenges associated with negative population growth.