Andrew Sabisky discusses the increasing difficulty that young couples are having in having children when they want to and having as many of them as they want. The biggest driver of this effect is the rise in housing costs and fall in house sizes, which constrains family sizes and is driving the country towards a demographic crisis.

In the UK and across the developed world populations are rapidly ageing and total fertility rates are substantially below replacement level—meaning a falling ratio of workers to dependents. In recent decades, immigration has propped up the supply of workers and kept the population pyramid in shape, but in the wake of Brexit, and an expected decrease in immigration, there is a clear need to raise birth rates. The nation’s low birth rate is not just an economic problem. International survey data indicate that many women across the developed world are not able to have as many children as they would like. International evidence shows that housing markets have substantial effects on fertility: rising house prices may boost fertility for homeowners, but slash fertility amongst renters — between 1996 and 2014 157,000 children were not born due to the cost of living space. In little more than a decade, home ownership rates have collapsed among young people, as house prices and rents continue to rise. If current trends are maintained we may expect fertility to fall even further. Free-market reforms to housing regulations could help raise fertility and improve the country’s long-term economic and social prospects.

Read this paper.