Under Pressure: How Do Housing Prices and Income Affect Birth Preference in China

Abstract

With a declining demographic trend nowadays, China is facing a critical challenge in pursuing economic growth. Previous literature has discussed that housing pressure and individual income are the main factors influencing fertility choices in contemporary society. However, very few have focused on how housing markets and income influence fertility behaviors under the specific situation that China faces. In this study, by conducting fixed-effect models, I use datasets from the CGSS survey and the NBS to investigate how housing prices and personal income affect birth preference in China. Results show that wealthier individuals prefer fewer children, and that people are less willing to have children when local housing prices become higher. Regional models show that the correlation between housing prices and birth preference is higher in cities where housing prices are high. Models based on gender differences show that females tend to be more focused on income, while males are more responsive to housing prices. Also, quadratic analysis shows that there is a U-shaped relationship between income and birth preference, which shows a decreasing trend until income is about 280,000 RMB (43,800 USD).