Credit constraints and college attendance

Mengyi Cao, Qing Xia

Research output: Journal PublicationArticlepeer-review


This paper shows that housing wealth alleviates credit constraints for potential college attendees by enabling homeowners to extract equity from their property and invest it in education. Using a comprehensive U.S. individual-level survey dataset, we find that one standard deviation increases of housing prices translate into approximately 72,000 more students enrolled in college each year. Our results stay significant when we use proxies for aggregate housing demand shocks and for the topological elasticity of housing supply to generate variation in home equity that should be exogenous to the decision of going to college.

Original languageEnglish
Pages (from-to)432-446
Number of pages15
JournalApplied Economics
Issue number4
Publication statusPublished - 17 Jun 2022


  • College attendance
  • home equity
  • human capital

ASJC Scopus subject areas

  • Economics and Econometrics


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