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The Crowding-out Effect of Homeownership on Fertility

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Abstract

Mulder (Demogr Res 15:401–412, 2006) argues that homeownership has influences on a household’s fertility decision; however, literatures have concluded different findings regarding whether homeownership promotes or delays a family’s reproduction behavior. In this study, we construct the regional-based panel data comprising 23 counties and cities from 1994 to 2007 in Taiwan to investigate how and to what extent homeownership will affect fertility. Our empirical results show that the private homeownership rate is negatively related to the birthrate in Taiwan. It indicates that, under limited budget resources available in each household, the homeownership and reproduction decisions seem to compete and crowd out each other; however, from the results of the lagged models, the crowding-out effect diminishes as time goes by.

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Notes

  1. Under the Baby Bonus Scheme, parents will get a cash gift of up to $4,000 each for the 1st and 2nd child, and $6,000 each for the 3rd and 4th child. (https://www.babybonus.gov.sg/bbss/html/index.html).

  2. See Thévenon (2009) for more details.

  3. In Japan, parents with a dependent child less than the age of 16 are eligible to exempt 380,000 yen from income tax (Suzuki 2006). In Spain, a working mother with a child under the age of three is subsided a tax credit of 1,200 euros per child (Sleebos 2003).

  4. The childbirth subsidies in Hsinchu City are: first born (NT$15,000); second born (NT$20,000); third born (NT$25,000); twins (NT$50,000); triplet and more (NT$100,000).

  5. The sixteen counties are Taipei, Ilan, Taoyuan, Hsinchu, Miaoli, Taichung, Changhua, Nantou, Yunlin, Chiayi, Tainan, Kaohsiung, Pingtung, Taitung, Hualien, and Penghu. The five cities comprise Keelung, Hsinchu, Taichung, Chiayi, Tainan; Taipei city and Kaohsiung city both are two municipalities.

  6. We also consider the random effect model in our panel data estimation. However, the Hausman test shows that the fixed effect model is more appropriate than the random effect model. Thus, we only illustrate the fixed effect model and provide its results in this study.

  7. The common international statistical usage of the childbearing years is ages 15–44 or 15–49. Taiwan uses the later definition.

  8. In this study, 1998 is the lunar tiger year, and 2000 is the lunar dragon year.

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Acknowledgement

The author would like to thank the anonymous referees and the editor of the journal for their helpful comments. In addition, the financial support from the National Science Council in Taiwan (NSC-96-2415-H-004-010) and the research assistance of Min-Yu Wu are gratefully acknowledged.

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Authors and Affiliations

  1. Department of Public Finance, National Chengchi University, No. 64, Sec. 2, Zhi-nan Rd, Wenshan, Taipei, 11605, Taiwan

    Kuang-Ta Lo

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Lo, KT. The Crowding-out Effect of Homeownership on Fertility. J Fam Econ Iss 33, 108–117 (2012). https://doi.org/10.1007/s10834-011-9256-1

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