The Effect of Liquid Housing Wealth on College Enrollment

This article uses short-run housing wealth changes to identify the effect of housing wealth on college attendance. I find that households used their housing wealth to finance postsecondary enrollment in the 2000s when housing wealth was most liquid; each 10, 000 in home equity raises college enrollment by 0. 7 of a percentage point on average. The effect is localized to lower-resource families, for whom a 10, 000 increase in housing wealth increases enrollment by 5. 7 percentage points. These estimates imply that the recent housing bust could significantly negatively affect college enrollment through reduction in the housing wealth of families with college-age children.