Monday, April 07, 2008

The link between fertility and housing

I've been meaning to pass this story from the NY Times on the relationship between fertility and housing along for quite a while. First the excerpts, then my comments.
For the first time in 35 years, America’s total fertility rate — the estimated number of children a woman will have in her lifetime — reached 2.1, the theoretical level required to maintain the country’s population, according to recent data from the National Center for Health Statistics.
...

But at a time when no cocktail conversation is complete without a discussion of real estate, the boomlet raises a question that has long interested social scientists: What is the relationship between fertility and real estate?

In the wide-open mortgage climate early this decade, creative loan products allowed more people than ever to buy homes, often a precursor to having children. In 2006, the babies arrived — a reminder, perhaps, that if you build it, they will toddle. (cute)

...

Social scientists have long traced a connection between housing and fertility. When homes are scarce or beyond the means of young couples, as in the 1930s, couples delay marriage or have fewer children. This tendency helps account for the relatively dismal birth rates of many developed nations... “One reason there are so few children in Italy is that housing is so hard to come by,” Mr. Engelman said. “Houses are bigger in the U.S. and generally more available. That may help explain why Americans have more babies.
...

For decades, Americans have built increasingly bigger houses, even as family size declined. Bigger houses mean incentives to stay home and fructify, Mr. Kahn said.

...

With their low birth rates, Europe, Japan, China and parts of the Middle East face the burden of shrinking productive work forces and aging populations (a vicious cycle: gloomy economic prospects lead to low birth rates, which lead to gloomy economic prospects). For the United States, then, the boomlet is a healthy sign

I've posted on this topic before, and summed it up with rule "rising affluence seeks more private space." As they state above, in the U.S., that means buying a bigger house (typically in suburban "sprawl") to accommodate the same size family. Or, if forced to stay in denser or smaller housing for affordability, mobility, or regulatory reasons (like anti-'McMansion' ordinances, urban growth boundaries, etc.), as in Europe, Japan, and in many U.S. urban areas, they will shrink the size of their families to compensate and create more space per person. If you can't grow the house, you have to shrink the household.

This doesn't mean density is bad - it's a fine choice for those who want to live that way. But it's bad public policy to try to force it.

This also doesn't mean people are sitting around saying "Hmmm... we have a big house. Might as well fill it with kids." Instead, there are a lot of couples and families in cramped housing trying to decide if they can afford to upgrade to more space and increase their family size, or if they're stuck where they are at their current household size. If they can get the space they feel they need, the kids will come.

Thanks to Adam for the link.

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15 Comments:

At 6:52 PM, April 07, 2008, Anonymous common_sense said...

Anti-sprawl and smart growth policies may have a negative effect on family size (is that really a bad thing) but if done properly it also improves the environment, provides more green space, etc.

There is also a relationship between education level and family size. As a country becomes more educated and industrialized, average family size decreases. Using your logic, this should also be discouraged.

 
At 7:46 PM, April 07, 2008, Anonymous Anonymous said...

We must have been reading a different article, common_sense. I didn't see Tory supporting increased family size above all else.

 
At 8:58 PM, April 07, 2008, Blogger Tory Gattis said...

I think replacement, about 2.1 children per woman, is just about right. Obviously much higher is not good, but much lower can also be very bad, creating huge burdens on the young when larger generations of older workers retire. China, Japan, and Europe are facing gigantic problems here.

Education and industrialization vastly increase productivity and economic resources to tackle all sorts of problems (including the environment - developed nations are far better here than developing ones), so obviously it's a good thing.

 
At 7:03 AM, April 08, 2008, Blogger ian said...

"Bigger houses mean incentives to stay home and fructify, Mr. Kahn said."

What the heck? I don't need no stinkin' incentive to fructify! Heck, the act of fructification is an incentive in itself!

 
At 3:56 AM, April 09, 2008, Blogger Clarence said...

There's a logical fallacy here, and that you're conflating high housing costs with highly dense living situations. You can build densely (stick construction -- which still affords high density development at 3-4 stories; I'm not sure about the economics of concrete construction) at market-competitive costs per sf versus greenfield suburban development. Building densely is not necessarily mutually exclusive with low housing costs.

Also, to take a different tack to this post, let's do a quick and temporal comparison of the relationship between sf/family to family size -- according to the NAHB, the average American home in the 1950's had roughly half the sf of the average American home in 2005. The fertility rate in 1950 was 2.98, which is almost one full point higher than the contemporary fertility rate. Obviously, this can largely be explained through rising income levels (economic and sociological literature has certainly teased out this relationship). But, just to make a point, this also says that larger homes in isolation do not necessarily precipitate higher fertility rates. Maybe larger homes for a higher income cohort has this relationship, but we're now talking conjecture.

It might be a nice research project (or part of a more comprehensive phd thesis) to run several regressions in order to tease out relationship between income, fertility and home size, if there was a robust, contemporary data set for that. I don't think that the NAHB or the NAR keeps a data set like that.

 
At 7:41 AM, April 09, 2008, Anonymous RedScare said...

"For decades, Americans have built increasingly bigger houses, even as family size declined."

What a strange conclusion to draw from the above statement, that Tory even highlighted in his post. For 35 years, family size declined as home size grew. Finally, there is a slight uptick in family size, and Tory jumps to the conclusion that home size did it? What about the other 34 years?

A better place to look for answers might be the explosion of immigrants from the south during the last 10 years.

 
At 7:50 AM, April 09, 2008, Blogger Tory Gattis said...

That would be a good study.

To respond to your first paragraph: I can see how it's theoretically possible, but somehow it doesn't seem to happen that way. Condos always seem much more expensive on a per sq. foot basis than suburban houses. Maybe it's a demand issue: houses can be sold near construction costs in greenfield suburbs, but where demand is high in-town is where condos get built and are sold well above construction cost (most of which is for the land). I'm pretty sure if you ran a general price regression against the country, dense dwellings, in general, would average a much higher price per sq. foot than single-family homes.

> But, just to make a point, this also says that larger homes in isolation do not necessarily precipitate higher fertility rates.

Agreed. It is definitely related to income. Obviously much of the developing world packs large families into very small dwellings. But all indications are that as a society gets wealthier, they are less and less likely to tolerate that. To compensate, they try to both add space and shrink household size. In most countries, it looks like the latter is easier than the former. The U.S. built large freeways to big houses on the suburban fringe, and has been able to keep up its fertility rate to at least replacement level vs. other developed nations. This despite the fact that wealth is correlated with smaller family size, and we are nearly the wealthiest nation on the planet on a per capita basis. Yet our fertility is higher than places like Europe and Japan that have lower GDP per capita.

 
At 8:31 AM, April 09, 2008, Blogger Tory Gattis said...

RedScare: family size might have declined *faster* - as it did in Europe and Japan - if the houses had not been growing larger.

The first years of the 21st century had historically low mortgage rates, enabling many people wanting to start or grow a family to upgrade to more space. That's the uptick. I'm not saying it's the sole cause - immigration is probably part of it too - but it is one of the drivers.

 
At 9:46 AM, April 09, 2008, Anonymous mike said...

Tory, you can't just pick and choose what you want to attribute each change in statistics to. RedScare makes a pretty valid point: if increased housing size means larger families, why have American families gotten smaller over the last forty years as housing size grew? To add to that, why was America growing fastest back in an era of small houses and dense urban living? Why are the fastest growing areas of the world today those in which people are likely to have tiny houses or no house at all?

I can't imagine that an intelligent alien life form surveying planet earth would come to the conclusion that large house size leads to population growth.

 
At 10:09 AM, April 09, 2008, Blogger Tory Gattis said...

> if increased housing size means larger families, why have American families gotten smaller over the last forty years as housing size grew?

See last comment to RedScare. If housing size does not grow as fast as wealth and the desire for more personal space per person, then household size will still decline overall - but it would have declined even faster if the houses had not gotten larger, as in Europe and Japan.

> To add to that, why was America growing fastest back in an era of small houses and dense urban living? Why are the fastest growing areas of the world today those in which people are likely to have tiny houses or no house at all?

Because we were much poorer then, and they are much poorer now. Poorer households tend to have larger families. It fits the rule: "affluence seeks more private space" - therefore less affluence is relatively more comfortable with less personal space. Try asking middle class or higher Americans to have a family of 4,5, or more in a 1-2 bedroom apartment, and see how many takers you get.

 
At 12:51 PM, April 09, 2008, Blogger Michael said...

One thing we are overlooking, at least in the cases of China and Japan, is that part of the reason these places have lower birth rates is that they are constrained by space and natural resources, and in the case of China the government imposed a one-child policy.

Now, if the suggestion is somehow that building "The Woodlands" all over the world was a good way to increase family size and stabilize populations, I think that overlooks the key fact that such development is not sustainable on a global scale (and may not even be sustainable in the US). A better solution would be finding more ways of producing dense, affordable housing - condos and high-rises - with 1500-2500 sqft, 3-4 bedrooms, for the masses. But there are a whole host of other problems to deal with, from transportation, to medical care, to food supply, that a country like China may have to deal with if they plan on growing their population into the 2-3 billion range. Suggesting that they start building 5 bedroom homes in the suburbs of Shanghai is not a serious solution to China's problems - at best, it is a niche solution for the wealthy.

 
At 1:38 PM, April 09, 2008, Anonymous mike said...

"See last comment to RedScare. If housing size does not grow as fast as wealth and the desire for more personal space per person, then household size will still decline overall - but it would have declined even faster if the houses had not gotten larger, as in Europe and Japan."

And like I said in response to that comment, you can't just pick and choose what you want to attribute each change in statistics to. You can't say "Fertility went down before because of increased wealth, but now it's going up because of increased house size." You don't have the evidence to say that.

 
At 2:06 PM, April 09, 2008, Blogger Tory Gattis said...

> You don't have the evidence to say that.

No, just a logical correlation. A hypothesis that fits the trends.

I agree China is a special case. Because they have such strong central govt control, I imagine they will evolve along the same dense lines as Japan, and, to a lesser extent, Europe. They also face very high demographic pressures from the one-child policy, with a very large older cohort - but they also have the power to dictate much higher retirement ages, and lower health care expenditures, to compensate.

 
At 8:11 PM, April 14, 2008, Blogger engineering said...

Hum, the size of a house determines the number of children people have. Perhaps the number of children that people have is likely to determine the size of their home.
I personally think the change of birth rate is due to immigration. And also think that the larger the house the less income, less time, and desire to have more children.
Of course the size and cost of housing changes with urban vs. suburban.
The China syndrome might not apply because the large migration from the country into the cities.
I do find a bit strange the eight categories for quality of life indicators:
1. Air Quality
2. Billboards
3. Green Buildings
4. Litter and Graffiti
5. Parks and Open Space
6. Tax Delinquent or Abandoned Lots
7. Trees
8. Water Quality
I think these are indicators of a political strategy for a higher office. Personally I put air quality as numero uno, but i would place quality of schools and cost of housing as numero uno y dos.
A side note: when family use to arrive to Intercontinental they would take METRO express bus and I would pick them up downtown, convenient for all. They don't any more because somehow METRO changed the routes a couple years back and the convenience for using the express route was no more.
Many years back I took the express METRO bus to both airports. It used to be a fair service considering the cost but a far cry from my experience in other cities. OK, taking the bus at one of the Moscow airports was not a fun one but considering the language and winter weather could have been worst - it was the first time in my life that I got paid to ride the bus (an accounting error).

 
At 10:53 AM, August 11, 2009, Anonymous Anonymous said...

It is interesting that the population of wealthier countries would have to be sustained by immigration. Here is an interesting article on the same subject - what the possible economic consequences are for such population growth: https://www.mindreign.com/en/mindshare/Global-Economics/Population-Relations/sl35291137bp410cpp10pn1.html

 

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