Does Eviction Cause Poverty? Quasi-Experimental Evidence from Cook County, IL

John Humphries, Nicholas Mader (), Daniel Tannenbaum and Winnie van Dijk
Additional contact information
Nicholas Mader: Chapin Hall at the University of Chicago

No 2019-046, Working Papers from Human Capital and Economic Opportunity Working Group

Abstract: 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.

Keywords: evictions; financial distress; poverty (search for similar items in EconPapers)
JEL-codes: H00 I30 J01 R30 (search for similar items in EconPapers)
Date: 2019-07
New Economics Papers: this item is included in nep-pay and nep-ure
Note: MIP
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

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http://humcap.uchicago.edu/RePEc/hka/wpaper/Humphr ... erty-cook-county.pdf First version, July 21, 2019 (application/pdf)

Related works:
Working Paper: Does Eviction Cause Poverty? Quasi-Experimental Evidence from Cook County, IL (2019)
Working Paper: Does Eviction Cause Poverty" Quasi-Experimental Evidence from Cook County, IL (2019)
Working Paper: Does Eviction Cause Poverty? Quasi-Experimental Evidence from Cook County, IL (2019)
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