The Impact of Parental Wealth on College Degree Attainment: Evidence from the Housing Boom and Bust

This study provides new evidence on the impact of parental wealth on college degree attainment. Using geocoded data from the Panel Study of Income Dynamics (1968–2017) linked to local housing price data from the Federal Housing Finance Agency, the empirical strategy analyzes parental housing wealth changes induced by local housing booms of the late 1990s–early 2000s and the subsequent housing bust of the 2007–2009 period. 2SLS/IV estimates show parental wealth significantly increases the likelihood of earning a four-year college degree. Moreover, the combined effects of parental income and wealth are significantly greater than the effects of income alone.