Housing costs, self‐employment, and fertility

Abstract

AbstractThe decline in fertility across advanced nations is a well‐known fact. Becker famously argued that declining rates of childbirth were the by‐product of higher levels of economic development and human capital. Recently, it has been suggested that two additional factors might lead to declining rates of childbirth—the higher housing costs of expensive cities and the change in the nature of work and employment from more regular and secure full‐time work to less secure arrangements, like self‐employment. Our research examines the effect of these two classes of factors—housing costs and self‐employment—on fertility, in regard to both the rate of childbirth and the delay in the age at which people have children. We use detailed panel data covering all Swedish individuals in their prime childbearing years (20–45) for the 10‐year period 2007–2016. Our findings indicate that the likelihood of having a child is affected negatively by increased housing costs and positively by self‐employment. Both result in a delay in the parental age at which children are born. Of the two, self‐employment has a relatively large effect.