52 Pages Posted: 23 Jul 2014 Last revised: 22 Jun 2020

Date Written: February 16, 2020

Abstract

This paper documents that mortgage market deregulation helps mitigate the risk of population aging by affecting a foundational family-level decision: the choice to have children. Using a US federal regulator ruling, I show that young households fully exposed to mortgage market deregulation increase their probability of purchasing a home and having a child by six percentage points. Supplemental tests reject alternative hypotheses based on income or housing wealth growth and, instead, suggest that access to space is the relevant economic mechanism. Collectively, the evidence indicates that increased access to mortgage credit impacts the total number of children in the economy.