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House price growth when children are teenagers: a path to higher earnings?

Listed author(s):
  • Cooper, Daniel H.

    ()

    (Federal Reserve Bank of Boston)

  • Luengo-Prado, Maria Jose

    ()

    (Federal Reserve Bank of Boston)

The United States has a long history of promoting homeownership through the mortgage interest tax deduction, and home equity constitutes an important source of borrowing collateral. There is a sizable body of work studying how fluctuating house prices impact consumer behavior. Since college tuition costs pose a large financial burden for many U.S. families, access to housing equity may impact decisions about pursuing a post-secondary education. This paper adds to the literature by using MSA-level house-price variation and data from the Panel Study of Income Dynamics to study the link between future adult earnings and the house price growth that occurs around the time children are 17 years-old, when most college enrollment decisions are made, and how this link varies based on whether parents own or rent their homes. The sample period runs from 1979 through 1999.

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Paper provided by Federal Reserve Bank of Boston in its series Working Papers with number 14-13.

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Length: 48 pages
Date of creation: 23 Dec 2014
Handle: RePEc:fip:fedbwp:14-13
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  1. Joseph M. Harkness & Sandra J. Newman, 2003. "Effects of homeownership on children: the role of neighborhood characteristics and family income," Economic Policy Review, Federal Reserve Bank of New York, issue Jun, pages 87-107.
  2. Gordon B. Dahl & Lance Lochner, 2012. "The Impact of Family Income on Child Achievement: Evidence from the Earned Income Tax Credit," American Economic Review, American Economic Association, vol. 102(5), pages 1927-1956, August.
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  15. Lien, Hsien-Ming & Wu, Wen-Chieh & Lin, Chu-Chia, 2008. "New evidence on the link between housing environment and children's educational attainments," Journal of Urban Economics, Elsevier, vol. 64(2), pages 408-421, September.
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