Housing Price Collapse Worsens Opportunities for Education For Youth in Cities Nationwide

Note from the Digital Editor: In order to highlight the high-level of research and scholarship from the authors who have published in the William & Mary Policy Review’s peer-reviewed print journal, we have reproduced the abstracts from Volume 7, Issue 1 along with a link to an electronic copy of the full form of the piece. 

The issues of greatest importance to Latinos, according to a recent poll, are those involving the economy and job creation, immigration reform, and education reform. Education reform is of particular importance to Latinos because of the strong linkage between educational attainment on the one hand and greater employment and income prospects on the other hand. In point of fact, many Latino families find their children attending public schools that can be characterized as receiving poor funding. Indeed, the public schools in cities with elevated high school dropout rates, for both young Latinos and other young people, are those that have the least amount of funding per pupil. And Latino students, along with their African American counterparts, on average, zpersistently score the lowest in the National Assessment of Educational Progress for the 4th, 8th, and 12th grade levels. The present study takes the position that the funding problems for public education in many cases may be attributable to the housing crisis component of the Great Recession. The recent housing crisis and its concomitant decline in housing prices may well have played a significant role in this public school funding problem because a very significant portion of public school funding comes from local property taxes that are based on home prices. The collapse in prices that occurred during the Great Recession reduced property tax revenues and thereby the principal source of funds available to public schools. Moreover, the housing price declines were greater in those cities with higher proportions of high school dropouts. Without reforms in our public school financing system that are targeted to a greater degree to help younger people in less well-off communities, the educational achievement of population cohorts such as Latinos/Hispanics and their African American counterparts is likely worsened. We now discuss in more detail these and related issues.

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I-Ling Shen has been a graduate student in Finance at Auburn University in Auburn, Alabama. Dr. James R. Barth is the Lowder Eminent Scholar in Finance at Auburn University in Auburn, Alabama. Dr. Richard J. Cebula is the Walker/Wells Fargo Endowed Chair in Finance at Jacksonville University in Jacksonville, Florida.