Public Education and Intergenerational Housing Wealth Effects

Michael Gilraine, James Graham and Angela Zheng

No 31345, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: E21 E24 I24 J62 R21 R23 (search for similar items in EconPapers)
Date: 2023-06
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Working Paper: Public Education and Intergenerational Housing Wealth Effects (2024)
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