The research showed that for children living in owned homes rather than rental units, math achievement scores are up to 9 percent higher, reading achievement is up to 7 percent higher and behavioral problems are 1 to 3 percent lower.
These results held true after the researchers took into account a multitude of factors that may have influenced the findings, such as the fact that homeowners earn more and have higher levels of education than renters.
"Homeownership itself is good for children," said Donald Haurin, co-author of the study and professor of economics at Ohio State University.
Homeownership seems to benefit children because the environments in homes – including such things as safety, maintenance and the availability of educational materials – are on average better than those in rental units, the study suggests. In addition, the greater stability of homeowners is good for children's development.
Haurin conducted the study with R. Jean Haurin, a retired research scientist at Ohio State, and Toby Parcel, a former sociology professor at Ohio State now at Purdue University. Their results appear in the current issue of the journal Real Estate Economics.
The researchers used data from the National Longitudinal Survey of Youth, a survey conducted by Ohio State for the U.S. Department of Labor. This study involved 1,026 children who were 5 to 8 years old in 1988 and included surveys of the children's parents in 1988, 1990, 1992 and 1994.
One of the main reasons that children of homeowners did better was the differences in living environment, Haurin said. Findings showed that owning a home compared with renting leads to a 13 to 23 percent higher-quality home environment. This was measured by responses of the parents to survey questions and also by observations made by researchers who conducted the survey.
The home environment encompassed both the physical and emotional setting. The physical environment included a variety of factors, such as whether there were obvious safety hazards in the home, more subtle issues such as the quality of lighting, and whether the home contained intellectually stimulating materials, such as magazines.
"Owners have more of an incentive to make improvements in their home and create a more positive living environment," Haurin said.
"They may be able to do things like create a better play area for their children, which could help their intellectual development." Homeowners are also more likely to take care of dangers – such as lead-based paint in the home – that have been shown to harm children.
The emotional environment of the home included the parents' activities with their children, such as how often they ate meals as a family and how many activities they did together.
"We were skeptical at first that homeownership would have any connection with the emotional environment, but it turned out that it did," Haurin said. "Homeowners had on average a better emotional environment for their children than did renters."
But the benefits for children came from more than just the improved environment, he said. The remainder of the benefits may come from the fact that homeowners tend to stay in one place longer than renters. This stability means that children stay in the same schools, and parents and children invest more time in developing positive relationships with their neighbors and the community. This investment in neighbor and community relationships may promote positive child outcomes.
The benefits of homeownership were also shown by the fact that children did better the longer they lived in owned homes. "It's a cumulative effect," he said.
One of the strengths of this study, according to Haurin, is that the researchers were able to control for many of the factors other than homeownership that may influence child outcomes.
"It's easy to convince people that homeowners have nicer homes than those of renters," he said. "It's harder to convince people that there is an independent effect of homeownership on children's outcomes once you have controlled for all these other factors. But that's exactly what we found."
Haurin said they were able to control for many characteristics researchers have connected to child outcomes, including parent's wages, wealth and education, whether the children's mother worked, number of siblings, marital status and history of the mother, and neighborhood characteristics, to name a few.
The results of this study show the value in existing federal tax codes and programs that promote homeownership, Haurin said. "The government should target homeowner tax relief to families who have young children so these children can benefit," he said.
Moreover, the study shows that discrimination against minorities in providing loans or others assistance to buy homes is hurting children. "Our study suggests that discrimination against minorities in the housing market has the effect of reducing the level of cognition and increasing the behavioral problems of minority children," he said.
Written by Jeff Grabmeier, 614-292-8457; Grabmeier.1@osu.edu.
Journal
Real Estate Economics