According to a recent study, one of the primary causes of the declining birth rate in the U.S. between the 2000s and the 2010s was the rising cost of housing.
Birth rates are complicated and multifaceted, and economists and demographers have identified a number of causes for their general decline, including significant cultural changes and financial hardships. Many of these causes and discussions around them were already thoroughly examined by Newsweek.
However, a recent study by Benjamin K. Couillard, a doctorate candidate in economics at the University of Toronto, indicated that 51% of the fall in the fertility rate between the 2000s and 2010s was caused by growing housing expenses since 1990.
Similarly, Theodore Cosco, a research fellow at The Oxford Institute of Population Ageing, told Newsweek that “addressing declining birth rates would require comprehensive support mechanisms, such as affordable child care, paid parental leave, health care access and economic stability.”
How U.S. Housing is Shaping Fertility, Birth Rates & More
A number of nations, including the U.S., have historically low birth rates. This is concerning to many since it may result in an aging society, where there are more elderly people than working-age individuals to support them.
According to the Congressional Budget Office’s most recent prediction, the nation’s fertility rate—the average number of children a woman has in her lifetime—is now expected to average 1.6 births per woman over the next thirty years. That is less than the 2.1 births per woman replacement rate needed to keep the population steady in the absence of immigration.
According to Couillard’s rent-focused investigation, he discovered that, “rising costs since 1990 are responsible for 11 percent fewer children, 51 percent of the total fertility rate decline between the 2000s and 2010s, and 7 percentage points fewer young families in the 2010s.”
“This analysis concludes that the supply of housing suitable for families can meaningfully contribute to demographic sustainability,” Couillard said.
According to Couillard, high rents lower fertility by forcing people into housing arrangements that are less conducive to raising children, such sharing a home with friends or relatives, as well as by directly raising the cost of having children.
According to the analysis, family formation is postponed, household arrangements change, and overall fertility decreases as housing costs rise.
Data analysis and intricate simulation are two components of Couillard’s methodology. He created a model that simulates how people decide where to live and when to have children by analyzing real-world data, specifically from the U.S. Census Bureau, to see how fertility varies when rents rise in various neighborhoods.
He then tested “what if” scenarios using this model, such as what would happen to birth rates if more large homes were available or if housing were more affordable.
According to the U.S. Bureau of Labor Statistics, rents increased by an estimated 149% nationwide between 1990 and 2020—more than the cumulative inflation rate of 103% over that time.
Numbers Shift as Housing Industry Remains Volatile
In 1990, the fertility rate was 2.08. According to data from the Centers for Disease Control and Prevention (CDC), it fell to 1.64 in 2020 and to a record low of 1.599 last year.
“I conclude that rising housing costs are a major cause of declining fertility. … If housing is to be a lever in family policy, the focus must be on producing the housing that families actually want,” Couillard said.
As the population ages and the labor force declines, the controversy over the birth rate in the U.S. will probably get more heated, according to the report. The majority of experts Newsweek has spoken with concur that there isn’t a single reason or way to stop the birth rate fall, and many of them support economic changes that would make it simpler for people to become parents.
“While it’s not surprising that high rents and housing costs curb fertility, it’s very difficult to ‘prove’ it in the data,” said Jake Krimmel, Senior Economist at Realtor.com, in his review of the study. “Not only that, but the causal link needs to be quantified, so we know exactly how important the housing cost channel is relative to, say, the rising cost of childcare or other economic and demographic shifts.”
In conclusion, Margaret Anne McConnell, a Professor of Global Health Economics at Harvard, and other scholars emphasized that there is good news concealed in the falling birth rate since it signifies certain favorable cultural trends, such as increased reproductive choice.
To read the full research paper, click here.
