Household financialization, debt expansion, and low fertility in China

The rapid financialization induced scholars’ attention to the fertility consequences of household debt in developed countries, but it remains unclear whether and how household debt affects fertility behavior in developing countries. Using data from the China Family Panel Studies from 2010 to 2022, this study investigated the effect of household debt in household financialization on fertility behavior in the Chinese context and explored potential mechanisms in the debt–fertility linkage. Results showed that debt expansion generated substantial fertility-decreasing effects among households. The adverse fertility outcomes of indebtedness were caused by a deterioration of physical and psychological health and marital relationships. The negative influence of household debt on fertility behavior was largely driven by mortgage debt rather than non-mortgage debt in China. The negative fertility impact of debt, particularly mortgage debt, was more prominent in urban households than in rural households. These findings demonstrated that household debt expansion was a contributor to low fertility in contemporary China. Our study extended to the literature on fertility and financialization by revealing the role of finance as a structural force in shaping demographic behavior.