Measuring the Benefits of Homeowning: Effects on Children

In this paper we examine whether homeowning benefits children by testing whether children of homeowners stay in school longer than children of renters and whether daughters of homeowners are less likely to have children as teenagers than daughters of renters. We use both probit models and a bivariate probit technique which takes account of possible selection bias due to differences between parents who choose to own versus rent. We find in several data sets that both effects are statistically significant and quantitatively important—particularly for low-income households. We also estimate that the dollar benefit per low- income household of parents being homeowners rather than renters is at least $31,000.