An Empirical Analysis of the Impact of Housing Prices on Fertility Rates in Taiwan

Abstract

The low fertility rate has been a global concern, especially in developed economies. High housing prices are proposed to be the most important factor causing the low fertility rate. This study aims to investigate the impact of housing prices on fertility in Taiwan. The empirical sample includes 19 local governments in Taiwan from 2012 to 2021, and the model was estimated using the fixed-effect model. The results show that the ratio of house price to income and the residence education level are significantly negatively correlated with the fertility rate. On the other hand, the area of land for public facilities and the population growth rate are significantly positively correlated. Based on the results, this study suggests that the government should provide more social housing to restrain the housing price, alleviate young people’s financial burden, and to increase their willingness to fertilize. Besides, the government should enhance the quantity and quality of public daycare centers to allow parents to work with peace of mind. Finally, the government should provide more public facilities, such as public transportation and park, to enhance the quality of living environment to encourage childbirth.