Do higher rents discourage fertility? evidence from U.S. cities, 1940-2000

This paper documents the existence of a negative cross-sectional correlation between the price of living space and fertility using U.S. Census data over the period 1940-2000. This correlation is not spurious, nor does it reflect the tendency of larger families to locate within less-expensive areas of a given metropolitan area. We examine the extent to which the results reflect the sorting of married couples across metropolitan areas on desired fertility. The relationship between the unit price of living space and fertility in fact tends to be more negative for households that have moved recently. However, the probability of migration between metropolitan areas is smaller for larger families, even those originating in more expensive cities. Moreover, Durbin-Wu-Hausman tests reveal only limited evidence of endogeneity. The weaker effects of the price of living space for less mobile couples seems to be at least in part a result of their choosing to live in less-expensive portions within a given metropolitan area