The housing boom led to one of the lowest college enrollment rates in the history of the U.S., a new study reveals. The housing boom that occurred from the late 90’s and into the early 2000’s escalated housing prices in many parts of the U.S., earning tidy sums for many. Tidy enough for most to ditch college for open employment.
When the housing industry was a hot commodity from the late 1990s to 2006, many jobs were found that did not need a college education. To a majority of high school graduates, being offered employment with good perks made going to college a dodgy affair.
According to the study published by the National Bureau of Economic Research, “The housing boom improved labor market opportunities for young men and women, thereby raising their opportunity cost of college-going.”
The authors of the study, Prof. Kerwin Kofi Charles, Erik Hurst from the University of Chicago and finally Mathew Notowidigo from Northwestern University, further said that “The boom substantially lowered college enrollment and attainment for both young men and women.”
The researchers compiled cross city information between the housing boom periods, together with empirical data sources such as the Census Bureau and the Department of Education to formulate a concise graph of college admissions over the period.
The graph revealed that the percentage of men and women joining college before the boom increased gradually before taking a hit during the boom when the housing prices were highest. The researchers, however, reported an increase in college membership in some states. According to the researcher, “that would be as a result of the high real estate earnings availing parents with the money to send their kids to school.”
When the market burst, thousands of workers were left without a job and education as they had forestalled college for the market. What followed was an aged generational crisis between those who had been working without the relevant papers and those who had gone to college.
Researchers said, “Our evidence suggests that these cohorts have experienced a sort of ‘educational scarring,’ whereby their rates of attainment are permanently lower than would have been true had there been no boom.”
Many Americans fail to go to college because of the high tuition fees. The research solidifies the myth that economic earnings are directly proportionate to the work done.