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New Discussion Paper: Housing Costs, College Enrollment, and Student Mobility

New Discussion Paper: Housing Costs, College Enrollment, and Student Mobility

The rental price boom during the 2010s affected college enrollment substantially.

In a new discussion paper, Johannes Göhausen and Stephan Thomsen analyze the effects of rental price changes on college enrollment rates. The authors exploit cross-district variation in the size and timing of local rental price booms in Germany during the 2010s. A one standard deviation increase in apartment rents decreased per-capita college enrollment by 1.1 percentage points on average. The effect was driven by first-year students moving long distances to a lower degree, and was more pronounced in less densely populated locations. Housing costs - the largest component of students' expenditures and an important location factor - have contributed to the slowdown in higher education expansion and reduced the skill-binding effect of universities, exacerbating regional inequality.

The paper "Housing Costs, College Enrollment, and Student Mobility" is available as IZA Discussion Paper No. 16726.