According to a report issued by the National Bureau of Economic Research there is a direct link between how the housing and job market is performing college attendance.
The report says that college attendance experienced a “significant slowing” between the late 1990s when the housing market started to pick up and 2006 when it began to stall.
According to the report, written by University of Chicago’s Erik Hurst and Kerwin Kofi Charles and Northwestern University’s Matthew J. Notowidigdo, the housing boom accounts for 30 percent of the college attendance slowdown amongst young adults aged 18 to 25 years during that time period.
The report also says growing home values are linked with many other economic improvements, especially growing household wealth. It says since housing has been the largest asset of American families, increasing home equity affects other areas of American life, such as an increasing demand in the labor market for a variety of associated jobs such as construction workers, gardeners, retail workers and nannies.
Labor market experts say that a plentiful job market is one of the main reasons why people skip or leave higher education. They say many young adults see time spent in school, coupled with the cost of schooling, as both earning time and money sacrificed. Even though the majority still agree that a college degree means a higher salary at the end of the road, during boom years, that trade-off can be less appealing.
This theory is supported by the report which shows the greatest impact on lowering college attendance was among two-year programs, because in times of higher labor demand,
the perceived value of an associate’s degree was only marginally better in terms of job opportunities and earning than a high-school degree.
The report shows that although enrollment in two year schools increased when the economy collapsed, when it did rebound, those who had bypassed school in favor of jobs were not among the enrollees. It showed that a large percentage of those that skipped out on school during boom years never re-entered the student population.
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