Each year, more than two million U.S. households have an eviction case
filed against them. Many cities have recently implemented policies aimed
at reducing the number of evictions, motivated by research showing
strong associations between being evicted and subsequent adverse
economic outcomes. Yet it is difficult to determine to what extent those
associations represent causal relationships, because eviction itself is
likely to be a consequence of adverse life events. This paper addresses
that challenge and offers new causal evidence on how eviction affects
financial distress, residential mobility, and neighborhood quality. We
collect the near-universe of Cook County court records over a period of
seventeen years, and link these records to credit bureau and payday
loans data. Using this data, we characterize the trajectory of financial
strain in the run-up and aftermath of eviction court for both evicted
and non-evicted households, finding high levels and striking increases
in financial strain in the years before an eviction case is filed.
Guided by this descriptive evidence, we employ two approaches to draw
causal inference on the effect of eviction. The first takes advantage of
the panel data through a difference-in-differences design. The second
is an instrumental variables strategy, relying on the fact that court
cases are randomly assigned to judges of varying leniency. We find that
eviction negatively impacts credit access and durable consumption for
several years. However, the effects are small relative to the financial
strain experienced by both evicted and non-evicted tenants in the run-up
to an eviction filing.
Tuesday, August 13, 2019
The effects of eviction are small relative to the financial strain experienced by both evicted and non-evicted tenants in the run-up to an eviction filing
See Does Eviction Cause Poverty? Quasi-Experimental Evidence from Cook County, IL by John Eric Humphries, Nicholas S. Mader, Daniel I. Tannenbaum and Winnie L. van Dijk.
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