Do foreclosures affect Boston public school student academic performance?

Abstract: Foreclosures have well-documented adverse consequences for families living in or owning properties undergoing foreclosure and on surrounding neighborhoods, but they may also have other costs. This policy brief summarizes our research on the impact of mortgage foreclosures on academic performance among Boston public school students. The data show that students who live at an address that experiences a foreclosure tend to score substantially lower on standardized tests (math and English) and also have substantially worse attendance. However, if we account for the influence of student characteristics, housing, and the student's past academic performance on test scores, the size of the foreclosure effects is reduced to nearly zero. We interpret these findings as indicating that underlying (yet unobserved) factors such as economic stress within the family contribute to both poor academic performance and the foreclosure event, rather than implying that foreclosure per se causes deterioration in a student's academic performance. We also find that foreclosures may harm academic performance indirectly by causing an affected student to change schools during the academic year. However, we cannot say with certainty that the strong negative association between a child's performance and school change ? whether the change is precipitated by foreclosure or by other circumstances ? reflects a causal relationship. Accordingly, public policies aimed at improving student performance should address family stressors that jointly cause decreased academic performance and foreclosures. Existing school assignment policies in Boston ? based as they are on citywide high schools and three broad zones ? loosen the link between residential moves and school changes during the school year. Other policies at the school, district, and community level may help to lessen the disruptive effects of academic-year school changes on performance.

JEL Classification: G21; I24; J24; I20;

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Bibliographic Information

Provider: Federal Reserve Bank of Boston

Part of Series: Public Policy Brief

Publication Date: 2013

Order Number: 5