How Real Estate Markets May Affect The Birth Rate

Transcript

DAVID GREENE, HOST:

All right. Our colleague Steve Inskeep recently sat down with NPR's Shankar Vedantam. Shankar joins us regularly to talk about social science research. This time the conversation was about having babies.

SHANKAR VEDANTAM, BYLINE: There's new research on how real estate prices might shape people's decisions to have children.

STEVE INSKEEP, HOST:

What?

VEDANTAM: The researchers Lisa Dettling and Melissa Kearney recently analyzed U.S. housing prices and births over more than a decade and they wanted to see whether increases and decreases in home prices affected fertility.

INSKEEP: OK. So home values go up and down, birth rates go up and down. What did they find - if any connection there?

VEDANTAM: Well, they found that rising real estate prices are correlated with an increase in fertility. And falling real estate prices are correlated with a decrease in fertility. So if you were to imagine a metro area where every resident was a homeowner, then a $10,000 increase in home prices seems to boost fertility by about five percent.

INSKEEP: Wow. Why would that be?

VEDANTAM: Well, here's the theory - the idea is that when people decide to have children many people say I want to have a stable job and get both feet on the ground before I have kids. And the prices of real estate might be playing a role in that. When you feel like your home values have appreciated, you say I can now afford to have kids because my home is now worth $200,000 more.

INSKEEP: It's like having money in the bank. I'm rich now because prices went up.

VEDANTAM: Exactly.

INSKEEP: But once they go down, you decide maybe not to have quite so many kids.

VEDANTAM: Precisely.

INSKEEP: I guess we should mention home prices affect people in different ways. If you own a house, higher home prices may be good for you. If you're trying to buy a house, or hoping, it might affect you very differently.

VEDANTAM: That's exactly right, Steve, and, in fact, the researchers find that for people who don't own homes this works exactly the other way. Falling real estate prices seem to be associated with increased fertility, presumably, because those people now say I'd like to have a family. I'd like to buy a bigger home, and now I actually can do it.

INSKEEP: So this must be connected to this larger sense that people's feeling of prosperity does in fact affect their family planning.

VEDANTAM: That's exactly the model that Dettling and Kearney are building, which is that it's an economic model. When you feel you're more prosperous, it's time to start popping out babies.

INSKEEP: OK. I'm going to go check the real estate listings and see what's going to be happening with fertility. Shankar, thanks very much.

VEDANTAM: Thank you, Steve.

INSKEEP: NPR's Shankar Vedantam.

GREENE: Shankar Vedantam joins us to explain interesting social science research. You can find him on Twitter @HiddenBrain. You can follow us @MorningEdition, @NPRinskeep and @nprgreene. This is NPR News. Transcript provided by NPR, Copyright NPR.