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Fertility and female wages: A new link via house prices

Day, Creina; Guest, Ross

Description

The analysis in this paper explains a new link between fertility and female wages that occurs through the effectof house prices. It is well known that higher female wages have an ambiguous effect on fertility: the positive income effect is offset by a negative substitution effect due to the higher opportunity cost of the maternal time required for child-rearing. Here it is shown that housing costs add a new dimension to this relationship. If the housing needs of children are a sufficiently...[Show more]

dc.contributor.authorDay, Creina
dc.contributor.authorGuest, Ross
dc.date.accessioned2016-06-14T23:20:42Z
dc.identifier.issn0264-9993
dc.identifier.urihttp://hdl.handle.net/1885/103508
dc.description.abstractThe analysis in this paper explains a new link between fertility and female wages that occurs through the effectof house prices. It is well known that higher female wages have an ambiguous effect on fertility: the positive income effect is offset by a negative substitution effect due to the higher opportunity cost of the maternal time required for child-rearing. Here it is shown that housing costs add a new dimension to this relationship. If the housing needs of children are a sufficiently important cost of child-rearing, then other costs of child rearing such as the opportunity cost of maternal time are rendered relatively less important. Hence the negative substitution effect of higher female wages on fertility is weaker, implying that higher female wages are more likely to boost fertility. This effect is stronger when the housing supply elasticity is high since house prices, and hence the costs of children, are kept in check. The analysis here helps to reconcile empirical observations about fertility, female wages and house prices in a number of countries. For governments concerned about low fertility, policies to increase housing supply elasticity in order to keep house prices in check would be helpful.
dc.publisherButterworths
dc.sourceEconomic Modelling
dc.titleFertility and female wages: A new link via house prices
dc.typeJournal article
local.description.notesImported from ARIES
local.identifier.citationvolume53
dc.date.issued2016
local.identifier.absfor140202 - Economic Development and Growth
local.identifier.absfor140205 - Environment and Resource Economics
local.identifier.absfor140210 - International Economics and International Finance
local.identifier.ariespublicationU3488905xPUB8288
local.type.statusPublished Version
local.contributor.affiliationDay, Creina, College of Asia and the Pacific, ANU
local.contributor.affiliationGuest, Ross, Griffith University
local.description.embargo2037-12-31
local.bibliographicCitation.issue2016
local.bibliographicCitation.startpage121
local.bibliographicCitation.lastpage132
local.identifier.doi10.1016/j.econmod.2015.10.047
dc.date.updated2016-06-14T08:51:42Z
local.identifier.scopusID2-s2.0-84951085355
CollectionsANU Research Publications

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