Housing Pressure, Youth Insecurity and Conditional Fertility Responses to Economic Downturns in Europe
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This paper examines whether fertility in Europe responds asymmetrically to macroeconomic expansions and contractions, and whether these responses are conditioned by housing-cost pressure and youth labour-market insecurity. Rather than relying on a composite socioeconomic pressure index, the analysis treats economic growth, downturns, housing overburden, youth unemployment, female labour-force participation and female tertiary education as distinct mechanisms. The empirical design is based on an unbalanced country-year panel covering 45 European countries between 1960 and 2025, combining data from the World Development Indicators and Eurostat. Economic growth is decomposed into positive-growth episodes, defined as booms, and negative-growth episodes, defined as downturns. Fixed-effects models are used to control for time-invariant country characteristics and common year shocks, while standard errors are clustered at the country level.
The findings do not support a broad unconditional asymmetry between booms and downturns. In other words, economic contractions do not appear to reduce fertility uniformly across all European contexts. Instead, the central result is conditional: downturns become significantly fertility-reducing when they occur under higher housing-cost pressure. In the main interaction model, the coefficient for the interaction between downturns and standardized housing pressure is negative and statistically significant, indicating that adverse macroeconomic shocks matter most when households are already exposed to affordability constraints. Youth unemployment is also consistently negatively associated with fertility, suggesting that labour-market insecurity among young adults represents an additional channel through which fertility may be delayed or reduced.
These results suggest that fertility responses to economic crises are not homogeneous across Europe. Rather, they are intensified when young adults face simultaneous barriers in employment, housing access and household formation. The paper contributes to debates on low fertility, economic uncertainty and housing regimes by showing that macroeconomic shocks are most consequential when embedded in broader structures of affordability and insecurity.
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Centar za demografska istraživanja Instituta društvenih nauka
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