Housing Bust and Long-Term Human Capital Scarring in the U.S

Anna Pestova and Alexander Popov

CERGE-EI Working Papers from The Center for Economic Research and Graduate Education - Economics Institute, Prague

Abstract: We document persistent human capital scarring among the children of homeowners who reached college age during the 2008–2011 housing bust. Negative shocks to parental housing wealth substantially reduced college attendance among first-year college-age children of homeowners, relative to their counterparts from renter households. In regions experiencing the largest declines in housing wealth, the educational gap between the offspring of homeowners and renters persisted for at least a decade. The shortfall in human capital accumulation translated into lower long-run employability, particularly in education-intensive sectors, and resulted in lower earnings among the affected cohort.

Keywords: Homeownership; housing wealth; human capital; housing boom-bust episodes (search for similar items in EconPapers)
JEL-codes: E32 I24 J24 (search for similar items in EconPapers)
Date: 2026-03
New Economics Papers: this item is included in nep-hre
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