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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Jobs move real estate

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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Suburban demographics refute city growth

Re: “Snob nation” from The Economist