Global fertility rates are falling, with major economic consequences. Conventional policies like parental leave and financial incentives have had limited impact. This column presents new evidence from Brazil’s housing credit lotteries, showing that early access to homeownership significantly boosts fertility rates. Housing affects family planning through affordability, stability, and relocation to better environments. Policymakers should consider housing reforms – such as subsidies and zoning changes – to support young families and address demographic challenges.
The world faces a significant demographic shift – fertility rates have been declining steadily over the past few decades, routinely plumbing new lows. As of 2021, 73% of the global population lived in countries where birth rates fell below the replacement level of 2.1 children per woman (see Figure 1). By contrast, only 4.3% of the global population faced this situation in 1960. This major demographic shift has potentially serious economic consequences, including slowing growth, higher burdens on social welfare systems, and pressures on labour markets (e.g. Bloom et al. 2024a, 2024b).
Figure 1 Fertility rates in 2021
Source: Gapminder/Our World In Data
Policymakers around the world have attempted to halt these trends by introducing measures such as paid parental leave, childcare subsidies, and direct financial incentives for having children. Despite the widespread adoption of such policies, fertility rates have continued to fall. For example, research by Olivetti and Petrongolo (2017) finds that even generous family benefits have had only modest effects on fertility in developed economies. Against this backdrop, emerging evidence indicates that effective policy solutions to declining fertility rates may be found in an unexpected domain, namely, housing.
The housing–fertility link
Housing interacts with fertility decisions in multiple ways. Housing is generally households’ largest asset and mortgages generally their largest liability and expense (Badarinza et al. 2016, Gomes et al. 2021); the location of housing facilitates access to schools and communities; and parental housing choices shape the environment in which children are raised. Numerous studies document the link between house prices, mortgage costs, and birth rates (Cumming and Dettling 2024, Dettling and Kearney 2014, Lovenheim and Mumford 2013). A continuing challenge in this area of research is establishing clear, unconfounded causal relationships between access to housing and fertility.
In a recent study leveraging Brazil’s housing credit lotteries, we provide causal evidence that access to housing affects fertility (van Doornik et al. 2025). Our analysis examines consórcios – a common group-lending mechanism in Brazil where participants pool monthly contributions and periodically receive housing credit through lotteries (for more details about the contract, also see van Doornik et al. 2024). Serving over 1.5 million participants annually, this unique system – in which there is random variation in the timing of housing access – provides clear evidence on the causal impacts of housing on fertility. By comparing the number of children in the families of lottery winners who gained housing credit to that of non-winners, we are able to isolate the effect of access to housing on fertility. The results indicate that for adults aged 20-25, randomly obtaining housing increases the probability of having children by 32% and the number of children by 33%, relative to the unconditional average (see Figure 2). Moreover, 20-24-year-olds who experienced a 10-year delay in accessing their housing via the lottery saw their lifetime fertility decrease by half relative to peers who obtained housing immediately (see the line marked with blue triangles in Figure 3).
Figure 2 How winning a housing lottery affects family planning across different age groups
Note: The red line tracks the likelihood of having children, while the blue line shows the number of children. The results are shown for different participant age groups at the time they joined the programme.
Figure 3 The dynamic treatment effects of winning a lottery on the probability of moving ZIP codes
Note: Panel (a) shows the event study estimates with 95% confidence intervals. The x-axis shows years relative to the lottery win, with the omitted category being the year before the win (t = -1). Panel (b) presents heterogeneous effects by age at the time of lottery participation, with 95% confidence intervals plotted for each estimate.
How housing shapes family decisions
This quantitative evidence on the importance of housing for family formation is strongly supported by qualitative evidence from a consorcio-conducted survey of participants aged 20-35. The survey found that 31% of housing consorcio participants join with a desire to start a family, while smaller proportions cited career (16%) or business purposes (17%) as reasons they participate in the consorcio.
Furthermore, we find empirical evidence of three key mechanisms linking housing and fertility decisions. First, winning the housing credit lottery permits families to alleviate space or housing quality constraints – prospective parents in cramped or low-quality houses can face physical and psychological barriers to expanding their households. Consistent with this channel, we find that consorcio lottery winners are more likely to change ZIP codes, with effects concentrated among younger individuals aged 25-35. These moves represent upward mobility: winners relocate to neighbourhoods with lower crime rates, higher incomes, and higher homeownership rates – environments that are safer and likely more conducive to raising children. The stronger effects for younger winners and the fact that they move to areas with more limited rental options (i.e. areas with higher homeownership rates) suggests that the randomly acquired housing credit helps to overcome rental market frictions that prevented households from accessing better neighbourhoods. This result complements the literature linking neighbourhood quality with children’s welfare and future life outcomes (Chetty et al. 2016, Chyn 2018).
Second, random access to homeownership can decrease expenses for erstwhile renters. For households previously renting (27% of survey respondents), gaining access to homeownership means that they no longer have monthly rent obligations. We find that individuals in areas with higher rental costs relative to income experience stronger fertility responses to random housing access. However, this ‘freeing up resources’ channel only partially explains our results, as the fertility effect plateaus at higher rent-to-income levels, suggesting that having long-term stable housing (and not just fewer expenses) is crucial for fertility decisions.
Third, our results highlight the importance of opportunity costs, particularly for women. In households where women contribute a smaller share of income (i.e. those facing lower career opportunity costs from child-rearing), we find that the fertility boost from housing access is greater. A ten-percentage point increase in the female income share is associated with a 0.056 percentage point decrease in the probability of having a child, or about 0.19% of the unconditional mean. Similarly, a ten-percentage point increase in the female income share is associated with a 0.0054 decrease in the number of children or about one percent of the unconditional mean. This aligns with models where women’s time allocation drives fertility decisions (Doepke and Kindermann 2019).
Policy implications: Targeting housing access to boost birth rates
The evidence from the Brazilian natural experiment lends itself to some policy recommendations.
- Timing matters. We find that the effects on fertility are concentrated among young adults, i.e. those in their peak childbearing years (20–35). Programmes that accelerate housing access for this demographic—through subsidised loans, down payment assistance, or rental-to-ownership pathways—could maximise demographic returns.
- Housing quality and affordability. We find larger effects for low-income households and those in areas with high rent-to-income ratios. Policies that expand access to spacious, well-located housing – such as mixed-income developments or zoning reforms – may therefore yield outsized benefits.
- Consider household dynamics. Since fertility effects are stronger in households where women contributed a smaller share of household income, this suggests that combining housing access with policies that address opportunity costs (like childcare support) could amplify the impact on fertility decisions. This idea resonates with Tertilt et al. (2022), who show that creating environments where women can reconcile career and motherhood is critical to improving fertility outcomes.
Conclusions
Although global fertility decline is frequently viewed as an outcome of urbanisation, education, and evolving household dynamics, the Brazilian natural experiment that we study suggests that material conditions – particularly housing – are also key determinants of family choices. While broader cultural and economic shifts certainly shape birth rates, interventions to improve the affordability and stability of housing bear promise to least partially counterbalance these trends.
For countries confronted by aging populations, this research indicates that housing policy is not merely about providing shelter – it can also shape demographic outcomes. By ensuring that young families have access to stable, spacious homes, governments may help to mitigate ongoing declines in fertility.
Source : VOXeu
