Mortgage and Demography: HSE Scientists Reveal How Mortgage Debt Shapes Family Priorities
Having a mortgage increases the likelihood that a Russian family will plan to have a child within the next three years by 39 percentage points. This is the conclusion of a study by Prof. Elena Vakulenko and doctoral student Rufina Evgrafova from the HSE Faculty of Economic Sciences. The authors emphasise that this effect is most pronounced among women, people under 36, and those without children. The study findings have been published in Voprosy Ekonomiki.
Russia is facing a demographic challenge due to declining birth rates in recent years. In response, the government has implemented various measures to support families with children, including maternity capital, allowances, and other benefits. One of the most widely used support measures is the family mortgage loan, which allows families to purchase a newly built apartment at an annual interest rate of 6%. The impact of this mortgage programme has not yet been studied. On one hand, large debt obligations may lead families to postpone having children. On the other hand, a mortgage programme that enables families to improve their living conditions could encourage higher birth rates and motivate the government to expand and strengthen mortgage subsidy mechanisms.
The authors analysed data from the 'Person, Family, Society' telephone survey, which included over 9,000 respondents. They selected individuals of reproductive age—between 18 and 49 years old—and focused specifically on responses to the question of whether they planned to have a child within the next three years. As previous studies have shown, approximately 40% of such reproductive intentions are actually realised.
The respondent’s mortgage loan was used as the main explanatory variable. To avoid confusion between cause and effect—such as a situation where someone takes out a mortgage because they already intend to have a child or plans a pregnancy after securing housing—the authors used the instrumental variables method. As an instrument, respondents were asked whether they would be willing to purchase housing with an interest-free mortgage. This made it possible to assess their propensity to take out a loan based on risk appetite, independent of their reproductive intentions.
The study reveals that having a mortgage loan increases the likelihood of intending to have a child within the next three years by 39 percentage points. In comparison, having a consumer loan increases this likelihood by only 3 percentage points. However, the results vary by gender. For women, having a mortgage loan increases the intention to have a child by 55 percentage points, while for men, this effect is insignificant.
Elena Vakulenko
'A possible explanation is the traditional distribution of roles in Russian society,' suggests Elena Vakulenko, Professor at the HSE Faculty of Economic Sciences. 'Women bear greater responsibility for managing family life and the home, and they are more frequently faced with the challenge of balancing work, motherhood, and financial obligations.'
Among respondents under the age of 36, having a mortgage increases the desire to have children by 40 percentage points. This effect also holds for individuals without children, but for those who already have children, a mortgage does not influence their reproductive plans.
'Based on the current survey data, we were unable to examine regional differences. However, in a new study using regional macrodata that we are currently conducting, we are also observing a positive relationship between the total fertility rate and the volume of mortgage loans issued,’ comments Vakulenko.
The authors note that the indirect effect of a mortgage loan should also be considered, as improving a family’s living conditions may increase the desire to have a child. 'In this case, a mortgage loan is less a burden on the family budget and more a tool for stability and improving living conditions,' explains Rufina Evgrafova, a doctoral student at the HSE Faculty of Economic Sciences.
To improve the demographic situation, the authors recommend further enhancing subsidised loan programmes—for example, by introducing targeted interest rates for young families without children and implementing dynamic subsidy mechanisms that reduce loan rates with the birth of each subsequent child. That said, the mortgage burden can become a deterrent if monthly payments place too much strain on the family budget.
Rufina Evgrafova
'The positive relationship between reproductive intentions and mortgage debt may indicate that improved living conditions outweigh income constraints. In this context, providing subsidised rental housing could have an even stronger positive impact on fertility, as it would reduce the negative effect of decreased disposable income caused by monthly mortgage payments,' Evgrafova notes.
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