Fertility-Household Credit Burden Nexus at the Present Stage

Abstract

The article examines the relationship between fertility and household credit burden using data for 79 countries for the period from 1990 to 2019. The authors identify 9 patterns describing the mutual influence of fertility and household debt burden. The analysis of patterns shows that the presence of a significant positive impact of households’ mortgage debt burden on fertility in future periods may indicate both a direct causal relationship between the indicators and the adoption of conditional decisions on pregnancy planning prior to obtaining mortgage loans to improve housing conditions. The same is true for households’consumer credit burden, as well as for quantitative estimates of the impact of fertility growth on households’ debt burden in subsequent periods. The article shows that in developed and developing countries, the growth of the total fertility rate is positively associated with the subsequent dynamics of mortgage and consumer loans in relation to GDP. In developed countries, the growth of mortgage and consumer loans is positively associated with the subsequent fertility dynamics. In developing countries, an increase in mortgage loans is positively but insignificantly correlated with fertility in the following years, while an increase in consumer loans leads to an increase in fertility in the short term, and to its decrease in subsequent years. The results indicate that success in demographic policy aimed at increasing fertility will be accompanied by the growth of households’debt burden, and therefore in subsequent periods households will be forced to pay interest and repay the principal debt, which will reduce families’ ability to finance children’s education. In this regard, state programmes that provide free education and development of children should be conducted in parallel with the implementation of demographic policy aimed at increasing fertility.