Delayed and depressed: from expensive housing to smaller families

Abstract

Individuals face challenges in acquiring suitable housing at multiple stages of their life. Many stages – leaving the parental home, partnering, having children – have historically clustered in the 20s and early 30s. Increasingly, these stages extend into the late 30s and early 40s. This paper proposes a new framework to assess the role of housing in shaping the physical and financial space individuals have to meet their family goals. It identifies two links, one indirect and one direct, between housing and family size. Indirectly, later exits from the parental home correspond to delays in family formation and smaller families. Directly, housing costs compete with spending on children prompting tradeoffs and smaller families. The two links are supported utilising cross-national microdata from 18 countries in Europe and North America during the mid-2000s with an additional analysis of four focus countries: Austria, Germany, France, and Italy. This paper adds to a growing body of literature emphasising the importance of housing, family formation, and family size. It also emphasises a need to reframe the focus of the literature from housing tenure and the second half of the adult life course to housing costs and the first half of the adult life course.