Housing Markets and the Education of Children
Robert Frank on “expenditure cascades” and running to stand still in the market for education for which, more often than not, the price is a house:
That cascade has raised the cost to poor and middle-income families of maintaining their places in the educational hierarchy. A good school, again, is one that compares favorably with other schools. To gain access to such a school, a family must bid for a house in the neighborhood that surrounds it, and that’s what has gotten more expensive. For example, in 2007 the median new house built in the United States had almost 50 percent more floor space than the corresponding house in 1980, notwithstanding the fact that median real household income had risen little during the intervening years. People could have abstained from trying to keep up with the housing expenditures of their peers, but that would have meant sending their children to worse schools than before.
Implicitly then families felt pressure to purchase expensive mortgages that they might not be able to afford in order to send their children to good suburban schools. Perhaps part of the the case against federalism? Link via MR.
