Back to School When Times are Bad? The Role of Housing Wealth

Anna Pestova and Alexander Popov

No 19785, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: College enrollment 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 enrollment among homeowners relative to renters during this period. Up to 2% of the local college-age population did not pursue college enrollment 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.

Keywords: Homeownership (search for similar items in EconPapers)
JEL-codes: E32 I24 J24 (search for similar items in EconPapers)
Date: 2024-12
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