Do Changes in Housing Prices and Rents Affect Fertility Decisions? A panel data study on women aged 20-45 in Switzerland.

Abstract: The following paper was carried out to investigate the effect of changes in housing prices and rents on fertility decisions. More specifically, by observing owners and renters of housing in Switzerland during 1999-2019. Previous studies have examined this relationship in various countries, but such a study had not yet been carried out in a Swiss setting. The source of data is an unbalanced panel dataset extracted from the Swiss Household Panel, a longitudinal large-scale household survey with thousands of annual respondents, complemented with price indexes describing regional aggregate price levels. Using a linear probability model extended with controls and fixed effects we estimate the relationship between the change in regional aggregate prices and rents on the probability of conception as a measure of fertility. In conjunction with past literature, we examine the impact of the wealth and cost effect that arises due to changes in housing prices and rents. Unaligned with results from previous research, our findings suggest a negative relationship between changes in housing prices and fertility with respect to owners, but no evidence of a relationship is found for renters. In conclusion, housing prices play an overall role in family planning in Switzerland which has considerable implications in a developed country with record low fertility rates.