Accounting for the decline in homeownership among the young

Yao, Yuxi

doi:10.1111/coep.12587

Cited by 6 publications

(3 citation statements)

References 30 publications

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“…Credible estimates of the effects of education are difficult to establish, however. The most common empirical approach is to investigate the impact of educational attainment on homeownership together with a wide range of controls for observable factors that take account of key demographic characteristics and household income (Fisher & Gervais, 2011; Goodman & Mayer, 2018; Gyourko & Linneman, 1996, 1997; Yao, 2019). These studies generally report a strong correlation between schooling and homeownership.…”

Section: Introductionmentioning

confidence: 99%

The effect of education on homeownership: Evidence from 20th century school attendance laws in the United States

Silles

2022

The Manchester School

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This article examines the causal impact of schooling on the probability of homeownership using decennial US Census data between 1960 and 2000. This is done by employing an instrumental variable approach that exploits historical changes in state mandatory schooling and child labour laws which affected the educational attainment of individuals with relatively low levels of schooling. Aggregate results suggest that policy‐induced increases in schooling at the bottom of the educational distribution have a positive impact on homeownership rates of 1.9 percentage points. Disaggregated results reveal that the impact of education is highest among individuals who are located in the middle and top terciles of the income distribution with no effect of additional education in the lowest tercile. These results add to the growing body of literature which suggests that education may lead to positive outcomes beyond labour market earnings.

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Section: Introductionmentioning

confidence: 99%

The effect of education on homeownership: Evidence from 20th century school attendance laws in the United States

Silles

2022

The Manchester School

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“…We have mentioned a few of the contributions in the previous section, and we highlight a few more here. For instance, Yao (2023) calibrates a life-cycle model and shows the rising population share of college graduates and the growing college premium may explain why the homeownership rate of young people has decreased in the United States. In the spatial equilibrium model of Parkhomenko (2022), when the price-rent and price-wage ratios grow faster in large cities than in smaller ones, some middle-income renters would leave large cities and move to smaller cities to become homeowners.…”

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confidence: 99%

Housing and Macroeconomics

Leung

2023

SSRN Journal

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“…Yao (2022) documents that the drop in American youth homeownership is mainly driven by non‐college‐educated workers. She then develops an overlapping generations model to rationalize such a phenomenon.…”

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confidence: 99%

A special issue on housing affordability: An introduction

Leung

Tsang

2022

Contemporary Economic Policy

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A casual search of "housing affordability" (HA) on Google delivers more than 190,000,000 results. While it is an imprecize measure, it confirms that HA is a global concern. Recent studies on the topic have been discussed by Ben-Shahar et al. (2020), Deng et al. (2019), Gabriel and Painter (2020), Leung (2022), among others.Motivated by the vast demand for affordability research, we organized a virtual workshop titled "Post-Crisis Housing Market and Financial Stability: Recovery without Affordability?" in July 2020. We thank Yin-Wong Cheung, who coorganized the workshop, and the City University of Hong Kong for the support. When planning the workshop in 2019, we considered the world after the Global Financial Crisis in 2008. Little did we know that the COVID-19 pandemic would impact the world on such, and probably larger, scale. Therefore, we appreciate the effort by Malpezzi (2022), who surveys the housing affordability issue post-COVID-crisis. While the impact of COVID may still be evolving (Wang et al., 2022) and the global economic situation could deteriorate with the Russia-Ukraine War (United Nations, 2022), we believe that Malpezzi (2022) will serve as a useful reference for future research.Previous research on housing affordability focuses on the demand side. Recent efforts pay attention to the supply side, including the real estate developer behaviors (e.g., Fan et al., 2022;Leung et al., 2020). In this special issue, Sun and Yiu (2022) examine the default probabilities of real estate developers in five ASEAN countries (Indonesia, Malaysia, Philippines, Thailand, and Vietnam) with firm-level data. If many real estate developers default at the same time, the new supply of housing will be affected, and house prices will also be affected. The firm-level approach is also in line with the current research trend.A distinct feature of this special issue is our balance of theoretical analysis, empirical evidence, and policy implications. The three other papers make use of structural models to produce sharp interpretations. For instance, Leung and Tang (2022) construct a dynamic equilibrium model where the house price-to-income ratio (PIR) evolves endogenously. PIR is a commonly used metric, but its equilibrium dynamics were not explored. Leung and Tang (2022) fill this gap. Based on their model, they derive a statistical test for detecting persistent deviations of PIR from the steady-state values. They also apply their model to OECD data.Yao (2022) documents that the drop in American youth homeownership is mainly driven by non-college-educated workers. She then develops an overlapping generations model to rationalize such a phenomenon. She finds that the root reasons are the rising college share and the widening of college premium. Based on her model, she recommends that eliminating mortgage interest tax deduction can increase the homeownership rate of non-college-educated workers.Last but not least, Yılmaz and Yeşilırmak (2022) build a spatial equilibrium model and compare the housing vouchers with the transport...

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Accounting for the decline in homeownership among the young

Cited by 6 publications

References 30 publications

The effect of education on homeownership: Evidence from 20th century school attendance laws in the United States

The effect of education on homeownership: Evidence from 20th century school attendance laws in the United States

Housing and Macroeconomics

A special issue on housing affordability: An introduction

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