House price growth when children are teenagers: A path to higher earnings?

This paper examines whether rising house prices immediately prior to children entering college have an impact on their earnings as adults. Higher house prices provide homeowners with additional funding to invest in their children’s human capital but also raise housing costs. The results show that a 1 percentage point increase in house prices, when children are 17 years-old, results in roughly 0.9 percent higher annual income for the children of homeowners, and 1.5 percent lower annual income for the children of renters. House price appreciation at age 17 also leads to higher college enrollment rates at age 19 and an increased likelihood of attendance at higher ranked post-secondary institutions for children of homeowners, as well as lower college enrollment rates for children of renters.