Children Families, Housing Prices and Small Urban Communities: Can High Housing Prices Affect the Number of Children in Certain Localities or Even Displace Families?

Abstract

The number of children in the Western world has been dropping dramatically so that children are becoming relatively fewer than their elders. Iceland has been sharing the same trend. Several regions in Iceland have been experiencing more rapid reduction than others in the number of children for the past two decades or so. Does fast growing tourism play any role in this matter? According to Lino (2001) , housing cost is one of the largest items in the marginal costs of raising children. Therefore, it is reasonable to assume that fast growing tourism leading to increased housing prices or any other factors influencing local housing prices could easily affect the residence of children families in Iceland. The paper will address this problem by creating a general model for the population development of children families, followed by a statistical estimation on a panel data sample against housing prices, covering all municipalities in Iceland during the period of 1990-2006 and another sample for all urban communities in the period 1991-2019. The result suggests that the number of children can decrease following an increase in local housing prices. Moreover, it is not likely to affect the number of inhabitants of the age of 50 - 66 years old but, surprisingly, likely to affect retired inhabitants similarly as children families.