How Rent vs Own Impacts Graduation and Teen Pregnancy Rates

rent vs own, benefits of home ownership

The house keys to your kids’ success?

Here’s the headline: Study Finds Parents Who Rent Raise Kids Who are Losers.

Here’s the reminder/lesson when reading headlines of studies: correlation is not causation.

The study, conducted by Richard K. Green and Gary D. Painter at the University of Southern California and Michelle J. White at the University of San Diego, found that the children of homeowners were 2.6 percent less likely to drop out of school than the offspring of renters. Even more alarming, homeowners’ kids were 5 percent less likely to get pregnant as teenagers than the wayward youth growing up with a landlord.

The researchers explained that those who were disciplined enough to save up for a down payment and follow through with monthly mortgage checks and all the upkeep ownership entails are probably also super disciplined parents who check homework and have lots of talks about birth control.

They came to this conclusion because the kids of all those people who bought no-money-down homes during the recent real estate bubble had outcomes similar to renters’ kids. So, you know, the whole family is genetically incapable of assessing risk.

Kids who lived in the same home for years and years also lowered their risk for dropping out of school. The explanation for this is that the family has laid down roots and built up a support system. The kids with the highest drop out rates lived as renters who frequently moved.

Michael Lerner over at The Motley Fool wrote about the dropout rate and teen pregnancy study for AOL’s Daily Finance page. He points out that researchers found parents’ marital status, income, race, and age of mother at the child’s birth had little impact on the two negative outcomes. Parents’ education had the biggest impact, however.

But isn’t it the case that education level predicts home ownership and also stability, which appears to be the real driver behind lower rates?

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