Home Ownership and School Outcomes of Children: Evidence from the PSID Child Development Supplement

Using the PSID Child Development Supplement (CDS) and the corresponding PSID main data sets, we examine whether home ownership has positive effects on the academic achievement of children after correcting for selectivity bias and controlling for home environment, neighborhood quality, residential stability, and income. While we find no independent effects of home ownership, there are positive significant effects of home environment, neighborhood quality, and residential stability on the reading and math performance of children between the ages of three and twelve. The main policy implication of our study is that improvement of a child's home environment, residential stability, and the quality of the neighborhood is more important than ownership of a home to achieve better child outcomes. Subsidized home ownership can lead to better child outcomes to the extent that it places a child in a better home environment, in a more stable residence, and in a better neighborhood.