Puzzling over the reasons for today's baby bust, economists Melissa S. Kearney and Lisa J. Dettling looked to the last baby boom for answers. Published by the National Bureau of Economic Research, their study finds a strong economic connection between homeownership and birth rates, challenging the view that personal finances are secondary to family planning. The researchers discovered that government-backed home mortgages, particularly those issued under the postwar G.I. Bill, played a transformational role. Among Americans of childbearing age, homeownership rose to 50 percent in 1960, from 20 percent in 1940. For every 1,000 new mortgages issued through government programs, there were about 300 additional births the following year. The findings suggest that housing security, not just income, influences the decision to have children. As housing costs rise and the median age of first-time buyers hits a historic high of 40, the study offers insights into policies that could reverse historic lows in fertility. Governments have tried tax credits and subsidized child care, but the research points to housing policy as a potent lever for encouraging family formation.

The Baby Boom began in 1946 after World War II. By 1957, the total fertility rate reached 3.7 children per woman. While previous hypotheses focused on economic security and reduced health risks, Kearney and Dettling examined the expansion of homeownership. The G.I. Bill gave millions of returning soldiers the ability to buy houses with low or no down payments, helping build the American middle class. Young families benefited most, with homeownership rising significantly among childbearing-age Americans. Researchers linked digitized mortgage records with demographic data to test the effect, finding a startling correlation between mortgage issuance and subsequent birth rates.