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Housing Bust and Long-Term Human Capital Scarring in the U.S

Author

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  • Anna Pestova
  • Alexander Popov

Abstract

We document persistent human capital scarring among the children of homeowners who reached college age during the 2008–2011 housing bust. Negative shocks to parental housing wealth substantially reduced college attendance among first-year college-age children of homeowners, relative to their counterparts from renter households. In regions experiencing the largest declines in housing wealth, the educational gap between the offspring of homeowners and renters persisted for at least a decade. The shortfall in human capital accumulation translated into lower long-run employability, particularly in education-intensive sectors, and resulted in lower earnings among the affected cohort.

Suggested Citation

  • Anna Pestova & Alexander Popov, 2026. "Housing Bust and Long-Term Human Capital Scarring in the U.S," CERGE-EI Working Papers wp817, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    • Handle: RePEc:cer:papers:wp817
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    Keywords

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    JEL classification:

    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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