Monetary Policy and Birth Rates: The Effect of Mortgage Rate Pass-Through on Fertility

• 成果类型: Article
• 署名作者: Cumming, Fergus; Dettling, Lisa
• 署名单位: Federal Reserve System - USA; Federal Reserve System Board of Governors
• 刊物名称: REVIEW OF ECONOMIC STUDIES
• ISSN/ISSBN: 0034-6527
• DOI: 10.1093/restud/rdad034
• 发表日期: 2024
• 页码: 229-258
• 关键词: business cycles; marriage; CHILDREN; IMPACT; shocks; MARKET; MODEL; booms; busts; debt

摘要

This paper examines whether monetary policy pass-through to mortgage interest rates affects household fertility decisions. Our empirical strategy exploits variation in households' eligibility for a rate adjustment, coupled with the large reductions in the monetary policy rate that occurred during the Great Recession in the U.K. and U.S. We estimate that each one percentage point drop in the policy rate increased birth rates amongst households eligible for a rate adjustment by 3%. Our results provide new evidence on the nature of monetary policy transmission to households and suggest a new mechanism via which mortgage contract structures can affect both aggregate demand and supply.