Poll: Do you think increased college education will strengthen California’s real estate market in the long run?
- No (51%, 42 Votes)
- Yes (49%, 41 Votes)
Total Voters: 83
Increased college enrollment rates may explain the troublesome, persistent fall in the labor force participation rate. Nationally, the participation rate among working-age Americans has fallen from 66% in 2007 to 64% as of January 2012.
Worse, the participation rate among those aged 16-24 years has fallen five percentage points between 2007 and 2012. Though these numbers are due in part to jaded job seekers quitting the search for employment, such pessimistic conclusions only explain a portion of the decreased participation rate.
Economists have determined a rise in college enrollment among young adults has contributed to a lower participation rate in the workplace. Fewer individuals are entering the workplace as they pursue a higher education and acquire additional skills in the pursuance of greater wealth. The enrollment rate for college students has increased from 57% in 2007 to 59% in the 2010-2011 school year.
Nearly one-third of the drop in the participation rate is attributed to the increased number of young adults who choose to postpone entering the labor force in favor of pursuing higher education, as reported by the Administration’s Council of Economic Advisors.
first tuesday take: The simultaneous rise in college enrollment and fall in labor force participation is a double-edged sword. On the con side, higher college enrollments means more student loans, which means inhibited financial mobility for newly minted graduates.
This would be a lesser problem if college students could be assured of stable, well-paying jobs immediately upon graduation. Unfortunately, the high unemployment rate among even educated and experienced professionals makes the probability of a hot job straight out of college unlikely for several years beyond graduation. The most that recent graduates can hope for in the current economy is to find a job that provides enough income to make their student loan payments, keep their heads above water and protect their vulnerable credit records.
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On the plus side, while the immediate impact of increased college enrollment ripples out from young adults to strap both them and the rest of the economy, the long-term benefits of higher education still trump current economic pains. Higher education means eventually higher income for graduates, which translates to higher credit limits to upgrade the quality of their future shelter, be it renting or owning: a definite benefit for their real estate agents.
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Witness the renewing power of recessions. No, we will not use the cliché of a phoenix rising from its ashes, but just affirm that a stronger, higher educated workforce will rebound quickly from the bottom of the economic pit. Real estate agents can expect much from this generation, but the standard suburban dream of the past will not likely be the destination of Generation Y (Gen Y). Look to the city for those future sales.
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Re: “Snob nation” from The Economist
I’m glad to see folks are participating and putting forth their opinions. It is heartening and I would like to thank First Tuesday for providing the forum.
The author seems to be stretching for a subject to write about. When Sara begins an article with “may explain”, I go “uh oh” in anticipation. I get the same feeling when I listen to a politician make an empty promise.
Perhaps the author would put forth some numbers instead of percentages. I always take percentages as doing half the job. How many students does 1/3 of the drop in the participation rate represent? With an actual number the connection between the participation rate and the housing market, could be discussed.
I guess it’s good to know some one is looking after the tiniest details, but the topic seems rather insignificant in view of the state of the real estate market.
I can’t see where higher education is going to trimp the unemployment problem. As stated above the grads will be loaded down with more debt than the students that came before them. I can’t see where they will be able to afford buying real estate for many years. Real Estate sales will be coming from those students who already have their degrees and have been working for a major corporation and are in the 35-55 age group.
The other second group will be seniors who wish to buy smaller homes. Both these groups will have the excellent credit needed to close escrow and have the 20% down payment, required in todays market.
Education costs are killing the grads with debt load. As the internet continues to be the brain of the planet, at no cost, folks will soon realize that education as a purchased path to prosperity, will fail, as more and more govt jobs which rely upon the degrees, will be as unaffordable as education itself.
I cannot wait for the demise of this elite and all its false values. A real change is coming, where true human values will break past the stale thoughts of the elites, who witness decline all around, yet still ask for more of the same as a high priced “solution”.
More jobs in California will require California to effectively and relistically deal with the high costs of doing businees and thervast overreguation that is causing companies to move OUT of California before there can be any significant incerese of jobs for Degreed persons.