Panel Paper: When Crisis Hits Home: A National Study of the Distal Effects of Foreclosures on Student Achievement

Thursday, November 7, 2019
Plaza Building: Concourse Level, Governor's Square 16 (Sheraton Denver Downtown)

*Names in bold indicate Presenter

Jacob Faber and Chantal Annise Hailey, New York University


This study assesses whether the foreclosure crisis of the early Twenty-First Century affected student academic performance. This project enhances scholarship on race and education by examining a potential mechanism through which spatial and racial inequalities manifest: housing disruption. Importantly, because this is the first systematic and national investigation of the effects of foreclosures on student outcomes, our findings will carry further implications for understanding the most severe housing crisis since the Great Depression and policies required to protect the most vulnerable during future economic downturns.

This project involves estimating changes over time in district-level student achievement (measured using data from the Stanford Education Data Archive (SEDA)) in response to foreclosures (measured using RealtyTrac data). We explore the acute, year-to-year effects of foreclosures from the peak of the crisis (2009) through the nation’s recovery (2015) in a fixed effects framework.

Although studies have estimated the effects of job loss on student test scores and several single-city studies have shown that foreclosures force students to change schools, no prior work has explored the role of the foreclosure crisis in shaping student achievement and segregation for the entire country. This research is only now possible through access to both SEDA and RealtyTrac data. With strong evidence of the growing importance of education as essential for economic mobility and segregation as a factor limiting educational opportunity for children of color, it is crucial to understand the effects of the Great Recession on the racialized geography of achievement. For example, was the stress of foreclosure-caused mobility detrimental to student test performance? Did the disproportionate impact of the foreclosure crisis on communities of color widen racial gaps in test scores? These and related questions are central to understanding the full consequences of the Great Recession and the ways in which housing market tumult can spill over into other areas of concern for policymakers, advocates for low income students, and stratification scholars. Because the housing market provides access to other spatially-organized goods, such as schools, residential instability among the poor and stability among the affluent combine to limit intergenerational and intragenerational mobility for the former and foster them for the latter—a dynamic that may be exacerbated during economic crises.

These analyses reveal that 7th and 8th students who attended schools in districts with higher foreclosure rates, on average, had lower Math standardized test scores. The foreclosure rate, however, only predicted 7th grade students’ performances on English tests. Furthermore, we find some differences in these relationships for White, Black, and Latino students. This project adds to the growing evidence on the proliferating effects of the Great Recession on young people’s educational outcomes.