Housing prices, social security, and fertility rate

This paper extends the overlapping generations model (OLG) to include housing prices, social security, and endogenous fertility, aiming to investigate the mechanism of actions regarding the profound impact of housing prices and two types of social security (tax-financed pension insurance and premium-financed medical insurance) on family fertility decisions. On this basis, we select panel data from 287 prefecture-level and above cities in China from 2010 to 2019 as research samples to construct a panel fixed effect model for empirical testing. The empirical results show that rising house prices reduce fertility rates. Both types of social security fund expenditures play a positive role in regulating the relationship between housing prices and fertility rate, implying that social security can effectively mitigate the dampening effect of housing prices on fertility. Heterogeneity analysis shows that both the crowding-out effect of housing prices on fertility and the positive moderating effect of social security between housing prices and fertility are mainly found in low- and medium-priced cities in the third and fourth tiers and below. We give further evidence from household-level data, which suggests that household social security participation also plays a positive moderating role between housing purchase burdens and the number of births.