Gary Painter

Race, Immigrant Status, and Housing Tenure Choice

This paper applies Census microdata from 1980 and 1990 to assess the determinants of housing tenure choice among racial and ethnic groups in the Los Angeles metropolitan area. Like previous research, our results indicate that endowment differences (income, education, andimmigrant status) largely explain the homeownership gap between Latinos and whites. Incontrast to previous work, we find that Asians are as likely to choose homeownership as are whites, and that status as an immigrant did not portend lower homeownership rates among Asians. However, the endowment-adjusted homeownership choice differential between whites and blacks remains sizable; further, that gap more than doubled between 1980 and 1990, to a full 11 percentage points.

Family Structure and Youths' Outcomes: Which Correlations are Causal?

Growing up in a family that lacks a biological father is correlated with a number of poor outcomes for youths. This study uses the National Educational Longitudinal Survey of 1988 (NELS) to examine the extent to which the apparent effects of divorce or remarriage are not causal, but are due to pre-existing problems or advantages of the family or youth. We find that the correlations between family structure and youth outcomes are causal: neither divorce nor remarriage appear to be related to pre-existing characteristics of the youth or family. Finally, unlike some previous research, we do not find gender differences in the effects of the presence of a father or stepfather.

The Schooling Costs of Teenage Out-of-Wedlock Childbearing: Analysis with a Within-School Propensity-Score-Matching Estimator

Teen out-of-wedlock mothers have lower education and earnings than do peers who have children later. This study uses the National Educational Longitudinal Survey of 1988 to examine the extent to which the apparent effects of out-of-wedlock teen childbearing are due to preexisting disadvantages of the young women and their families. We use a novel method that matches teen mothers to similar young women in their junior high school (that is, prior to pregnancy). We find that out-of-wedlock fertility reduces education substantially, although far less than the cross-sectional comparisons of means suggest. We further find that this effect is larger among those with lower probabilities of having a child out of wedlock.

The Role of Interest Rates in Influencing Long-Run Homeownership Rates

As a stated policy objective, the U.S. Department of Housing and Urban Development (HUD) seeks to boost the national homeownership rate to 70 percent by 2006. To accomplish this goal, they estimate that 3.8 million additional families be added to the ranks of U.S. homeowners. Furthermore, HUD estimates that the homeownership gap between minority and nonminority families must be reduced by a full 15 percent. Many policy instruments—both targeted and otherwise—have been suggested to increase homeownership. These range from low downpayment loans, greater access to credit in underserved areas, and interest rates subsidies. However, little is know about the efficacy of these measures to raise long-term homeownership rates. In this analysis, we focus on the role of interest rates on homeownership rates and the housing stock. In particular, we provide a critical review of the literature on the relationship between housing and interest rates in contrast to other determinants of homeownership and changes in housing supply. We then present our own estimates of the influence of interest rates on homeownership and housing starts. We find that interest rates play little direct role in changing homeownership rates. While changes in interest rates may affect the timing of changes in tenure status from renter to owner, the long-run ownership rate appears independent of interest rates. We find housing starts are, however, sensitive to changes in the interest rate. This implies that housing supply, or at least the timing of changes in housing supply, is sensitive to interest rates. It is though this mechanism that the stock of owner-occupied housing expands, though household formation and immigration may leave the ownership rate unchanged. We conclude by discussing whether other instruments, such as low down payment loans and improved technology for assessment of credit risk, may potentially be better suited to increasing long-term homeownership rates.

Does the Age That Children Start Kindergarten Matter? Evidence of Long-Term Educational and Social Outcomes

The appropriate age for students to begin school is an issue of debate for educators, administrators, and parents. Parents worry that young children may not be able to compete with older classmates; schools worry that young students will not be able to meet rigorous academic standards associated with school accountability. Past literature is inconclusive as to the overall effect of age at school entry. Some research suggests that younger students have lower average achievement in early elementary school, while others find that students with summer birthdates, who are assumed to be younger at school entry, gain more education on average. At present, little is known about the impact of age at school entry on education attainment as students transition from high school into college and the labor market. This study uses data from the National Education Longitudinal Survey to examine long-term effects of age at school entry on both educational and social outcomes, with special attention to those students who enter kindergarten a year later than their peers. The results of this study suggest that delaying kindergarten does not create any long-term advantages for students.

Is Full Better than Half? Examining the Longitudinal Effects of Full-Day Kindergarten Attendance

Kindergarten policy varies widely both across and within states. Over the past decade, a number of states have instituted a full-day kindergarten requirement and a number of others are considering it as a way of increasing educational achievement. Many parents also support full-day kindergarten as a source of child care. This paper uses the Early Child Longitudinal Study-Kindergarten Class of 1998-1999 to evaluate the efficacy of this policy. In ordinary least squares, probit, county fixed effects, and instrumental variables models, we find that there are initial benefits for students and the mothers of students that attend full-day kindergarten, but that these differences largely evaporate by third grade. Contrary to claims by some advocates, attending full-day kindergarten is found to have no additional benefit for students in families with income below the poverty threshold.

Homeownership Determinants for Chinese Americans: Assimilation, Ethnic Concentration and Nativity

Chinese homeownership rates in the Los Angeles Consolidated Metropolitan Statistical Area adjusted by socioeconomic and housing market characteristics are, on average, 18 percentage points higher than those of native white households. This finding runs contrary to most immigration literature, which suggests that immigrants usually lag behind the host society in measures of economic well-being. This study focuses on two additional factors, which most economic studies of homeownership choice ignore, that may play a role in helping Chinese households achieve high homeownership in ways that other immigrant groups do not. The results of this analysis find that the high homeownership rates cannot be explained by the English skills of households. The cultural influence of homeowning peers may have partially contributed to the higher homeownership of Chinese households. While living in ethnic Chinese communities lowers homeownership rates, in general, it helps improve the likelihood that Chinese immigrants will own a home. Finally, we find that there is great diversity among Chinese subgroups with respect to their likelihood of owning a home, but very little diversity with respect to the education and income level of Chinese households across subgroups. Copyright 2004 by the American Real Estate and Urban Economics Association

What Happens to Household Formation in a Recession

While many studies have investigated the determinants of housing demand, very few studies have focused on how economic conditions affect the formation of potential households directly. Potential households may choose to delay entry into the housing market by remaining with one’s parents during times of economic hardship or by combining with other persons to share housing costs. Using a variety of modeling approaches, we find that both the increase in the unemployment rate and the presence of recessions reduce the rate of household formation. Simulations suggest that these declines are substantively important. For example, in a recession, the likelihood that a young adult will form an independent household falls by 1–9% points depending on the age of the person. By way of comparison, if an individual is unemployed, the likelihood of leaving the parental home is up to 11% points lower.

Immigrants and Housing Markets in Mid-Size Metropolitan Areas.

The recent trend of immigrants arriving in mid-size metropolitan areas has received growing attention in the literature. This study examines the success of immigrants in the housing markets of a sample of 60 metropolitan areas using Census microdata in both 2000 and 2005. The results suggest that immigrants are less successful in achieving homeownership and more likely to live in overcrowded conditions than native-born whites of non-Hispanic origin. The immigrant effect on homeownership differs by geography and by immigrant group. Finally, we find evidence that immigrant networks increase the likelihood of becoming a homeowner.

Regional Disparities in Homeownership Trajectories: Impacts of Affordability, New Construction, and Immigration

Abstract In contrast to the 1980s, we find substantial increases in the homeownership rates of young adults in the 1990s. Focusing on the younger half of the baby boom generation, aged 35 to 44 in 2000, we explore the factors that caused steeper trajectories into homeownership in some metropolitan areas. Factors include prices and incomes, housing construction relative to employment growth, and rates of household formation and immigration. Homeownership gains are modeled separately for whites, blacks, Asians, and Hispanics. Our findings highlight the importance of household formation on regional homeownership rates. Evidence shows greater homeownership gains in areas with greater rent increases, indicating lower relative costs of owning, and with greater price increases, indicating greater investment incentives. Our findings also underscore the importance of keeping housing construction consistent with employment growth. Finally, the effect of immigration was especially important for Hispanics, sharply depressing homeownership in regions with more recently arrived immigrants.