Do Family Wealth Shocks Affect Fertility Choices? Evidence from the Housing Market Boom and Bust

While there is a great deal of literature focusing on the relationship between income and fertility, little is known about how wealth affects fertility decisions of the household. This paper fills this gap in the literature by investigating how changes in housing wealth affect fertility. In particular, we use the wealth variation supplied by the recent housing boom and bust to generate exogenous variation in household wealth. We first conduct a state-level aggregate analysis to investigate how the birth rate is related to housing prices using differences in the timing and size of the housing market boom and bust across different states over time. We then conduct an analysis using restricted-use data from the Panel Study of Income Dynamics that allows us to track how women’s fertility behavior is related to individual-level housing price growth. The demographic and geographic controls in the PSID allow us to control extensively for any confounding effects driven by household selection across different cities or neighborhoods, and we find that for homeowners, a $10,000 increase in real housing wealth causes a 0.07 percent increase in fertility. We find little effects of MSA-level housing price growth on the fertility of renters, which supports our identification strategy. That increases in housing wealth are strongly associated with increases in fertility is consistent with some recent work showing a positive income effect on births, and our estimates are suggestive that the large recent variation in the housing market could have sizeable demographic effects that are driven by the positive effect of housing wealth on fertility.

Increasing Time to Baccalaureate Degree in the United States

Time to completion of the baccalaureate degree has increased markedly in the United States over the last three decades, even as the wage premium for college graduates has continued to rise. Using data from the National Longitudinal Survey of the High School Class of 1972 and the National Educational Longitudinal Study of 1988, we show that the increase in time to degree is localized among those who begin their postsecondary education at public colleges outside the most selective universities. In addition, we find evidence that the increases in time to degree were more marked amongst low income students. We consider several potential explanations for these trends. First, we find no evidence that changes in the college preparedness or the demographic composition of degree recipients can account for the observed increases. Instead, our results suggest that declines in collegiate resources in the less-selective public sector increased time to degree. Furthermore, we present evidence of increased hours of employment among students, which is consistent with students working more to meet rising college costs and likely increases time to degree by crowding out time spent on academic pursuits.

WP 2017-361

This paper examines how older workers adjust their labor supply in response to information they receive about their retirement wealth from the provision of the Social Security Statement. We find that older male workers’ labor supply is highly responsive to receiving personalized information about future Social Security benefits, leading to a reduction of 119 hours worked per year, on average. However, our estimates point to significant heterogeneity in this response, with workers at the lower end of the hours-worked distribution increasing their labor supply and those at the high end decreasing their labor supply. We argue differences in knowledge about Social Security benefits across the labor supply distribution can explain much of this heterogeneity. We additionally explore the extent to which the information on the Statement may have led some workers to mistakenly reduce their labor supply by too much due to a lack of understanding of the dynamic nature of the Statement’s benefit projections with respect to earnings. Receipt of a second Statement led all but the lowest hour workers to increase their labor supply relative to workers who did not receive a second Statement. This is consistent with workers misunderstanding the information provided as accumulated rather than projected wealth. Our results point to older workers being very responsive to Social Security information, which highlights the need to accurately convey information about both pension wealth and its sensitivity to changes in earnings.Social Security Administration, RRC08098401, UM16-09https://deepblue.lib.umich.edu/bitstream/2027.42/138010/1/wp361.pdfDescription of wp361.pdf : Working pape

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.

The fatal toll of driving to drink: The effect of minimum legal drinking age evasion on traffic fatalities

There is a sizeable literature on the effect of minimum legal drinking age (MLDA) restrictions on teenage drunk driving. This paper adds to the literature by examining the effect of MLDA evasion across states with different alcohol restrictions. Using state-of-the-art GIS software and micro-data on fatal vehicle accidents from 1977 to 2002, we find that in counties within 25 miles of a lower-MLDA jurisdiction, a legal restriction on drinking does not reduce youth involvement in fatal accidents and, for 18 and 19-year-old drivers, fatal accident involvement actually increases. Farther from such a border, we find results consistent with the previous literature that MLDA restrictions are effective in reducing accident fatalities. The estimates imply that, of the total reduction in teenager-involved fatalities due to the equalization of state MLDAs at 21 in the 1970s and 1980s, for 18-year olds between a quarter and a third and for 19-year olds over 15 percent was due to equalization. Furthermore, the effect of changes in the MLDA is quite heterogeneous with respect to the fraction of a state's population that need not travel far to cross a border to evade its MLDA. Our results imply the effect of lowering the MLDA in select states, such as has been proposed in Vermont, could lead to sizeable increases in teenage involvement in fatal accidents due to evasion of local alcohol restrictions.Teen drunk driving Minimum legal drinking age Evasion

Does the Market Value Value-Added? Evidence from Housing Prices After a Public Release of School and Teacher Value-Added

Value-added data have become an increasingly common evaluation tool for schools and teachers. Many school districts have begun to adopt these methods and have released results publicly. In this paper, we use the unique release of value-added data in Los Angeles by the Los Angeles Times newspaper and the Los Angeles Unified School District to identify how school quality, as measured by value-added, is capitalized into housing prices. Unique to this setting is the release of both school and teacher-level value-added data, and this analysis is the first in the school valuation literature to examine property value responses to variation in teacher quality information. Using a difference-in-differences methodology surrounding several releases of value-added information, we find no effect on property values of receiving a higher value-added ranking post-information release. Neither the school or teacher value-added information is capitalized into home prices, even though we find evidence that test score levels are capitalized into home prices. Our results suggest that, despite the contentiousness following these data releases, homeowners and parents do not consider value-added to be a relevant school quality measure on the margin. ∗We would like to thank seminar participants at APPAM, CES-Ifo, Georgetown and the University of Michigan along with Steve Rivkin, Guido Schwerdt, Gary Solon, and Kevin Stange for helpful comments an