Echoes of rising tuition in students’ borrowing, educational attainment, and homeownership in post-recession America

Zachary Bleemer, Meta Brown, Donghoon Lee, Katherine Strair, Wilbert van der Klaauw

Research output: Contribution to journalArticlepeer-review

8 Scopus citations

Abstract

State public college tuition and fees have risen sharply in recent decades. In this paper we investigate how young Americans absorbed this increase and how it affected their post-schooling financial behaviors. Exploiting state-cohort variation in tuition increases, we find that recent student cohorts accommodated tuition shocks not by forgoing college education, but instead by amassing more debt. The rise in tuition and student debt in turn contributed to a sharp decline in homeownership which was concentrated in suburban and urban areas, especially in the US Northeast and West, and in higher-priced housing markets and locations in which younger adults make up a bigger share of the residential population. Thus tuition-hiking states can expect to see a response not through a decline in workforce skills, but through weaker future spending and wealth accumulation among young consumers.

Original languageEnglish (US)
Article number103298
JournalJournal of Urban Economics
Volume122
DOIs
StatePublished - Mar 2021
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics
  • Urban Studies

Keywords

  • Homeownership
  • Household formation
  • Student loans

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