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Title: Housing Boom, Labor Market Outcomes, and Educational Attainment

Citation Type: Miscellaneous

Publication Year: 2014

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Abstract: We assess the extent to which the recent housing boom and bust affected employment, wages, and college enrollment and attainment during the 2000s. We exploit cross-city variation in local housing booms, and we identify plausibly exogenous variation in housing demand using sharp structuralbreaks in local housing prices. We find that positive housing demand shocks significantly increased wages and employment between 2000 and 2007, particularly for less-skilled workers. Consistent with the idea that the housing boom increased the opportunity cost of college for workers on the margin of college attendance, housing demand shocks during the boom reduced college enrollment and attainment for both young men and women, with the effects concentrated at community colleges. Over the longertime horizon spanning the housing boom and bust, we find that the positive wage and employment effects of the boom were generally undone during the bust. However, the negativeeffects of the housing boom on schooling persist, suggesting that reduced educational attainment may be an enduring effect of the large, temporary increase in housingdemand.

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Authors: Charles, Kerwin Kofi; Notowidigdo, Matthew J.; Hurst, Erik

Publisher: University of Chicago

Data Collections: IPUMS USA

Topics: Education, Housing and Segregation, Labor Force and Occupational Structure

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