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How can a public education system actually create bankruptcies among families with children? When its failure causes housing prices to rise. This is one of the hidden and insidious costs of public education.
There's a new book, "The Two-Income Trap", that's been getting a lot of media coverage lately.
I haven't read the book, but found a substantial excerpt online. The book argues that a growing proportion of bankruptcies are caused by nondiscretionary spending like mortgage payments, not by too much discretionary spending:
A quick data check over at economagic yields this chart:
Sure enough, the overall trend is for housing prices to rise faster than general prices. (The chart I'd really like to see is of mortgage payments vs. CPI, but I don't know if they have that data. I can't find it, at least.)
Wouldn't higher prices be offset by more construction? Sure, in areas that are still able to grow. However, once a "good" school district is enclosed by other districts, people can only get in by bidding up the price of housing or by increasing the population density, and I doubt the latter is prevalent.
(I don't think this is a zero-sum situation where you'd expect decreased prices in "bad" districts due to favoring "good" districts. The research in "The Two-Income Trap" suggests that people have increased their total spending on housing because they're actually buying two things — a house and a "good" school district. "Bad" districts are free.)
Would school vouchers ease this trend by giving parents flexibility over what school their children attend? Sure, it would help a little, by diffusing what it means to live in a "good" district. (However, I'm extremely skeptical that vouchers would improve the overall quality of education.)
What would help the most is radical privatization of the school system, which would improve its quality everywhere and cancel the motivation behind the housing bidding wars.
It's prudent to mention that I have no idea whether the authors of "The Two-Income Trap" support privatizing education or to what extent they blame the public education system for the phenomenon they wrote about.