Credit constraints and college attendance

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.