Citations (3)



The Effect of Housing Wealth on College Choice: Evidence from the Housing Boom

Michael Lovenheim

Cornell University

C. Lockwood Reynolds

Kent State University

May 2012

NBER Working Paper No. w18075

The higher education system in the United States is characterized by a large degree of quality heterogeneity, and there is a growing literature suggesting students attending higher quality universities have better educational and labor market outcomes. In this paper, we use NLSY97 data combined with the difference in the timing and strength of the housing boom across cities to examine how short-run home price growth affects the quality of postsecondary schools chosen by students. Our findings indicate a $10,000 increase in a family's housing wealth in the four years prior to a student becoming of college-age increases the likelihood she attends a flagship public university relative to a non-flagship public university by 2.0 percent and decreases the relative probability of attending a community college by 1.6 percent. These effects are driven by relatively lower and middle-income families. We show that these changes are due to the effect of housing wealth on where students apply, not on whether they are admitted. We also find that short-run increases in home prices lead to increases in direct quality measures of the institutions students attend. Finally, for the lower-income sample, we find home price increases reduce student labor supply and that each $10,000 increase in home prices is associated with a 1.8% increase in the likelihood of completing college.

Number of Pages in PDF File: 43

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Date posted: May 12, 2012  

Suggested Citation

Lovenheim, Michael and Reynolds, C. Lockwood, The Effect of Housing Wealth on College Choice: Evidence from the Housing Boom (May 2012). NBER Working Paper No. w18075. Available at SSRN: http://ssrn.com/abstract=2056703

Contact Information

Michael Lovenheim (Contact Author)
Cornell University ( email )
Ithaca, NY 14853
United States
C. Lockwood Reynolds
Kent State University ( email )
Kent, OH 44242
United States
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