The effect of vouchers on sorting between private and public schools depends upon the price elasticity of demand for private schooling. Estimating this elasticity is empirically challenging because prices and quantities are jointly determined in the market for private schooling. We exploit a unique and previously undocumented source of variation in private school tuition to estimate this key parameter. A majority of Catholic elementary schools offer discounts to families that enroll more than one child in the school in a given year. Catholic school tuition costs therefore depend upon the interaction of the number and spacing of a family's children with the pricing policies of the local school. This within-neighborhood variation in tuition prices allows us to control for unobserved determinants of demand with a fine set of geographic fixed effects, while still identifying the price parameter. We use data from 3700 Catholic schools, matched to restricted Census data that identifies geography at the block level. We find that a standard deviation decrease in tuition prices increases the probability that a family will send its children to private school by one-half percentage point, which translates into an elasticity of Catholic school attendance with respect to tuition costs of -0.19. Our subgroup results suggest that a voucher program would disproportionately induce into private schools those who, along observable dimensions, are unlike those who currently attend private school.
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A Unified Framework for Measuring Preferences for Schools and Neighborhoods
October 2007
Working Paper Number:
CES-07-27
This paper develops a comprehensive framework for estimating household preferences for school and neighborhood attributes in the presence of sorting. It embeds a boundary discontinuity design in a heterogeneous model of residential choice to address the endogeneity of school and neighborhood attributes. The model is estimated using restricted-access Census data from a large metropolitan area, yielding a number of new results. First, households are willing to pay less than one percent more in house prices ' substantially lower than previous estimates ' when the average performance of the local school increases by five percent. Second, much of the apparent willingness to pay for more educated and wealthier neighbors is explained by the correlation of these sociodemographic measures with unobserved neighborhood quality. Third, neighborhood race is not capitalized directly into housing prices; instead, the negative correlation of neighborhood race and housing prices is due entirely to the fact that blacks live in unobservably lower quality neighborhoods. Finally, there is considerable heterogeneity in preferences for schools and neighbors: in particular, we find that households prefer to selfsegregate on the basis of both race and education.
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Immigrant Status, Race, and Institutional Choice in Higher Education
March 1998
Working Paper Number:
CES-98-04
This paper examines the postsecondary enrollment decisions of immigrant students, expanding on previous work by explicitly considering their choices among institution types and by examining differences across generations and racial/ethnic categories. Using data from the National Educational Longitudinal Study (NELS:88), we hypothesize that community colleges may play a more significant role in providing access to higher education for immigrants than for the native-born population. Our results support our hypothesis only among Asian immigrants. First-generation black immigrants have a higher probability of enrolling in private vocational schools, while second-generation Hispanics (and native blacks) have a higher probability of enrolling in both public and private four-year colleges and universities. Survey (1988)
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DO PUBLIC TUITION SUBSIDIES PROMOTE COLLEGE ENROLLMENT? EVIDENCE FROM COMMUNITY COLLEGE TAXING DISTRICTS IN TEXAS
September 2014
Working Paper Number:
CES-14-32
This paper estimates the effect of tuition rates on college enrollment using data for Texas from the 1990 and 2000 Censuses and the 2004 ' 2010 American Community Surveys and geographical data on Community College Taxing Districts. The effect of tuition on enrollment is identified by the facts that tuition rates for those living within a taxing district are lower than those living outside the taxing district and in Texas not all geographic locations are in a taxing district. While the estimated effect of tuition on enrollment depends on the sample used, it is negative and mostly statistically significant in the samples of iadults 18 and older and negative and sometimes statistically significant in the samples of traditional age students 18 to 24. The estimated effect of tuition on enrollment, however, is found to vary considerably by poverty level status with an increase in tuition rates having a statistically significant negative effect on college enrollment for those with household incomes that are at least 200% of the poverty level both for traditional aged students 18 to 24 years old and all adults 18 and older.
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The Impact of Childcare Costs on Mothers' Labor Force Participation
April 2025
Working Paper Number:
CES-25-25
The rising costs of childcare pose challenges for families, leading to difficult choices including those impacting mothers' labor force participation. This paper investigates the relationship between childcare costs and maternal employment. Using data from the National Database of Childcare Prices, the American Community Survey, and the Longitudinal Employer Household Dynamics, we estimate the impact of childcare costs on mothers' labor force participation through two empirical strategies. A fixed-effects approach controls for geographic and temporal heterogeneity in costs as well as mothers' idiosyncratic preferences for work and childcare, while an instrumental variables approach addresses the endogeneity of mothers' preferences for work and childcare by leveraging exogenous geographic and temporal variation in childcare licensing requirements. Our findings across both research designs indicate that higher childcare costs reduce labor force participation among mothers, with lower-income mothers exhibiting greater responsiveness to changes in childcare costs.
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Peer Income Exposure Across the Income Distribution
February 2025
Working Paper Number:
CES-25-16
Children from families across the income distribution attend public schools, making schools and classrooms potential sites for interaction between more- and less-affluent children. However, limited information exists regarding the extent of economic integration in these contexts. We merge educational administrative data from Oregon with measures of family income derived from IRS records to document student exposure to economically diverse school and classroom peers. Our findings indicate that affluent children in public schools are relatively isolated from their less affluent peers, while low- and middle-income students experience relatively even peer income distributions. Students from families in the top percentile of the income distribution attend schools where 20 percent of their peers, on average, come from the top five income percentiles. A large majority of the differences in peer exposure that we observe arise from the sorting of students across schools; sorting across classrooms within schools plays a substantially smaller role.
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Small Homes, Public Schools, and Property Tax Capitalization
March 2013
Working Paper Number:
CES-13-04
Efforts to estimate the degree to which local property taxes are capitalized into house values are complicated by any spurious correlation between property taxes and unobserved public services. One public service of particular interest is the provision of local public schools. Not only do public schools bulk large in the local property tax bill, but the inherent difficulty in measuring school quality has potentially undermined earlier attempts at achieving unbiased estimates of property tax capitalization. This particular problem has been of special concern since Oates' (1969) seminal paper. We sidestep the problem of omitted or misspecified measures of school quality by focusing on a segment of the housing market that likely places little-to-no value on school quality: small homes. Because few households residing in small homes have public school children, we anticipate that variations in their value does not account for differentials in public school quality. Using restricted-access microdata provided by the U.S. Census, and a quasi- experimental identification strategy, we estimate that local property taxes are nearly fully capitalized into the prices of small homes.
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Universal Preschool Lottery Admissions and Its Effects on Long-Run Earnings and Outcomes
March 2023
Working Paper Number:
CES-23-09
We use an admissions lottery to estimate the effect of a universal (non-means tested) preschool program on students' long-run earnings, income, marital status, fertility and geographic mobility. We observe long-run outcomes by linking both admitted and non-admitted individuals to confidential administrative data including tax records. Funding for this preschool program comes from an Indigenous organization, which grants Indigenous students admissions preference and free tuition. We find treated children have between 5 to 6 percent higher earnings as young adults. The results are strongest for individuals from the lower half of the household income distribution in childhood. Likely mechanisms include high-quality teachers and curriculum.
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Childhood Housing and Adult Earnings: A Between-Siblings Analysis of Housing Vouchers and Public Housing
January 2013
Working Paper Number:
CES-13-48RR
To date, research on the long-term effects of childhood participation in voucher-assisted and public housing has been limited by the lack of data and suitable identification strategies. We create a national level longitudinal data set that enables us to analyze how children's housing experiences affect adult earnings and incarceration rates. While naive estimates suggest there are substantial negative consequences to childhood participation in voucher assisted and public housing, this result appears to be driven largely by selection of households into housing assistance programs. To mitigate this source of bias, we employ household fixed-effects specifications that use only within-household (across-sibling) variation for identification. Compared to naive specifications, household fixed-effects estimates for earnings are universally more positive, and they suggest that there are positive and statistically significant benefits from childhood residence in assisted housing on young adult earnings for nearly all demographic groups. Childhood participation in assisted housing also reduces the likelihood of incarceration across all household race/ethnicity groups. Time spent in voucher-assisted or public housing is especially beneficial for females from non-Hispanic Black households, who experience substantial increases in expected earnings and lower incarceration rates.
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Divorce, Family Arrangements, and Children's Adult Outcomes
May 2025
Working Paper Number:
CES-25-28
Nearly a third of American children experience parental divorce before adulthood. To understand its consequences, we use linked tax and Census records for over 5 million children to examine how divorce affects family arrangements and children's long-term outcomes. Following divorce, parents move apart, household income falls, parents work longer hours, families move more frequently, and households relocate to poorer neighborhoods with less economic opportunity. This bundle of changes in family circumstances suggests multiple channels through which divorce may affect children's development and outcomes. In the years following divorce, we observe sharp increases in teen births and child mortality. To examine long-run effects on children, we compare siblings with different lengths of exposure to the same divorce. We find that parental divorce reduces children's adult earnings and college residence while increasing incarceration, mortality, and teen births. Changes in household income, neighborhood quality, and parent proximity account for 25 to 60 percent of these divorce effects.
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Where to Build Affordable Housing?
Evaluating the Tradeoffs of Location
December 2023
Working Paper Number:
CES-23-62R
How does the location of affordable housing affect tenant welfare, the distribution of assistance, and broader societal objectives such as racial integration? Using administrative data on tenants of units funded by the Low-Income Housing Tax Credit (LIHTC), we first show that characteristics such as race and proxies for need vary widely across neighborhoods. Despite fixed eligibility requirements, LIHTC developments in more opportunity-rich neighborhoods house tenants who are higher income, more educated, and far less likely to be Black. To quantify the welfare implications, we build a residential choice model in which households choose from both market-rate and affordable housing options, where the latter must be rationed. While building affordable housing in higher-opportunity neighborhoods costs more, it also increases household welfare and reduces city-wide segregation. The gains in household welfare, however, accrue to more moderate-need, non-Black/Hispanic households at the expense of other households. This change in the distribution of assistance is primarily due to a 'crowding out' effect: households that only apply for assistance in higher-opportunity neighborhoods crowd out those willing to apply regardless of location. Finally, other policy levers'such as lowering the income limits used for means-testing'have only limited effects relative to the choice of location.
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