Housing booms and busts, labor market opportunities, and college attendance

Kerwin Kofi Charles; Erik Hurst; Matthew J. Notowidigdo

doi:10.1257/aer.20151604

Housing booms and busts, labor market opportunities, and college attendance

Kerwin Kofi Charles, Erik Hurst, Matthew J. Notowidigdo^*

^*Corresponding author for this work

Economics

Research output: Contribution to journal › Article › peer-review

96 Scopus citations

Abstract

We study how the recent housing boom and bust affected college enrollment during the 2000s. We exploit cross-city variation in local housing booms, which improved labor market opportunities for young men and women. We find that the boom lowered college enrollment, with effects concentrated at two-year colleges. The decline in enrollment during the boom was generally reversed during the bust; however, attainment remains persistently low for particular cohorts, suggesting that reduced educational attainment is an enduring effect of the recent housing cycle. The housing boom can account for approximately 25 percent of the recent slowdown in college attainment.

Original language	English (US)
Pages (from-to)	2947-2994
Number of pages	48
Journal	American Economic Review
Volume	108
Issue number	10
DOIs	https://doi.org/10.1257/aer.20151604
State	Published - Oct 2018

Funding

* Charles: Harris School, University of Chicago, 1155 E. 60th Street, Chicago, IL 60637, and NBER (email: [email protected]); Hurst: Booth School of Business, University of Chicago, 5807 S. Woodlawn Avenue, Chicago, IL 60637, and NBER (email: [email protected]); Notowidigdo: Northwestern University, 2001 Sheridan Road, Evanston, IL 60208, and NBER (email: [email protected]). This paper was accepted to the AER under the guidance of Luigi Pistaferri, Coeditor. A prior version of this paper circulated as “Housing Booms, Labor Market Outcomes and Educational Attainment.” We thank four anonymous referees for their comments. We are grateful to Tom Davidoff, Edward Glaeser, Matthew Gentzkow, Kyle Kost, Michael Lovenheim, Ofer Malamud, Atif Mian, Enrico Moretti, Emily Oster, Amir Sufi, and seminar participants at the Columbia, Maryland, Northwestern, University of Chicago, the University of Houston, University of Illinois at Chicago, the AEA Annual Meetings, Yale-SOM, NYU, Princeton, University of British Columbia, UC-Berkeley, and New York Federal Reserve for helpful comments. We thank Dave Deming, Anthony DeFusco, Fernando Ferreira, Chris Mayer, Charles Nathanson, and Eric Zwick for generously sharing data. We thank Loren Fryxell, Vishal Kamat, Pinchuan Ong, Mariel Schwartz, David Toniatti, Haiyue Yu, and Dan Zangri for excellent research assistance. We gratefully acknowledge the Initiative on Global Markets at the University of Chicago Booth School of Business for financial support. Hurst thanks the Peter Wall Institute for Advanced Studies at the University of British Columbia, and Notowidigo thanks the Einaudi Institute for both financial support and hospitality while working on this project.

ASJC Scopus subject areas

Economics and Econometrics

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1257/aer.20151604

Cite this

@article{34fe388aa89e434bb2f2163faa7909ae,

title = "Housing booms and busts, labor market opportunities, and college attendance",

abstract = "We study how the recent housing boom and bust affected college enrollment during the 2000s. We exploit cross-city variation in local housing booms, which improved labor market opportunities for young men and women. We find that the boom lowered college enrollment, with effects concentrated at two-year colleges. The decline in enrollment during the boom was generally reversed during the bust; however, attainment remains persistently low for particular cohorts, suggesting that reduced educational attainment is an enduring effect of the recent housing cycle. The housing boom can account for approximately 25 percent of the recent slowdown in college attainment.",

author = "Charles, {Kerwin Kofi} and Erik Hurst and Notowidigdo, {Matthew J.}",

note = "Funding Information: * Charles: Harris School, University of Chicago, 1155 E. 60th Street, Chicago, IL 60637, and NBER (email: [email protected]); Hurst: Booth School of Business, University of Chicago, 5807 S. Woodlawn Avenue, Chicago, IL 60637, and NBER (email: [email protected]); Notowidigdo: Northwestern University, 2001 Sheridan Road, Evanston, IL 60208, and NBER (email: [email protected]). This paper was accepted to the AER under the guidance of Luigi Pistaferri, Coeditor. A prior version of this paper circulated as “Housing Booms, Labor Market Outcomes and Educational Attainment.” We thank four anonymous referees for their comments. We are grateful to Tom Davidoff, Edward Glaeser, Matthew Gentzkow, Kyle Kost, Michael Lovenheim, Ofer Malamud, Atif Mian, Enrico Moretti, Emily Oster, Amir Sufi, and seminar participants at the Columbia, Maryland, Northwestern, University of Chicago, the University of Houston, University of Illinois at Chicago, the AEA Annual Meetings, Yale-SOM, NYU, Princeton, University of British Columbia, UC-Berkeley, and New York Federal Reserve for helpful comments. We thank Dave Deming, Anthony DeFusco, Fernando Ferreira, Chris Mayer, Charles Nathanson, and Eric Zwick for generously sharing data. We thank Loren Fryxell, Vishal Kamat, Pinchuan Ong, Mariel Schwartz, David Toniatti, Haiyue Yu, and Dan Zangri for excellent research assistance. We gratefully acknowledge the Initiative on Global Markets at the University of Chicago Booth School of Business for financial support. Hurst thanks the Peter Wall Institute for Advanced Studies at the University of British Columbia, and Notowidigo thanks the Einaudi Institute for both financial support and hospitality while working on this project. Publisher Copyright: {\textcopyright} 2018 American Economic Association. All rights reserved.",

year = "2018",

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Housing booms and busts, labor market opportunities, and college attendance

Abstract

Funding

ASJC Scopus subject areas

UN SDGs

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Replication data for: Housing Booms and Busts, Labor Market Opportunities, and College Attendance

Cite this

Housing booms and busts, labor market opportunities, and college attendance

Abstract

Funding

ASJC Scopus subject areas

UN SDGs

Access to Document

Other files and links

Fingerprint

Datasets

Replication data for: Housing Booms and Busts, Labor Market Opportunities, and College Attendance

Cite this