Public Education and Intergenerational Housing Wealth Effects

Michael Gilraine, James Graham and Angela Zheng

No 100, Opportunity and Inclusive Growth Institute Working Papers from Federal Reserve Bank of Minneapolis

Abstract: While rising house prices are known to benefit existing homeowners, we document a new channel through which house price shocks have intergenerational wealth effects. Using panel data from school zones within a large U.S. school district, we find that higher local house prices lead to improvements in local school quality, thereby increasing children's human capital and future incomes. We quantify this housing wealth channel using an overlapping generations model with neighborhood choice, spatial equilibrium, and endogenous school quality. We find that housing market shocks generate large intergenerational wealth effects that account for around one-third of total housing wealth effects.

Keywords: Intergenerational mobility; Intergenerational wealth effects; school quality; Neighborhood choice; House prices (search for similar items in EconPapers)
JEL-codes: E21 E24 I24 J62 R21 R23 (search for similar items in EconPapers)
Date: 2024-10-11
New Economics Papers: this item is included in nep-dge, nep-lab and nep-ure
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Related works:
Working Paper: Public Education and Intergenerational Housing Wealth Effects (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedmoi:98965

DOI: 10.21034/iwp.100

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