Back to school when times are bad? The role of housing wealth

Alexander Popov and Anna Pestova

No 3083, Working Paper Series from European Central Bank

Abstract: College enrolment typically rises during recessions. This paper demonstrates that housing wealth destruction dampened this countercyclical effect in areas most affected by the U.S. housing bust of 2008-2011. By combining household data with a mortgage credit register and housing price data, we reveal that negative shocks to housing wealth significantly reduced college enrolment among homeowners relative to renters during this period. Up to 2% of the local college-age population did not pursue college enrolment at the height of the bust due to housing wealth destruction. The negative impact of homeownership on college education persists for a decade, contributing to persistently lower incomes among homeowners in the most affected areas. JEL Classification: I24, E32, J24

Keywords: college enrolment; homeownership; housing boom-bust episodes; housing wealth (search for similar items in EconPapers)
Date: 2025-07
New Economics Papers: this item is included in nep-lma
Note: 861282
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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:20253083

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