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

Author

Listed:
  • John Eric Humphries
  • Nicholas Mader
  • Daniel Tannenbaum
  • Winnie van Dijk
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.

Suggested Citation

  • John Eric Humphries & Nicholas Mader & Daniel Tannenbaum & Winnie van Dijk, 2019. "Does Eviction Cause Poverty? Quasi-Experimental Evidence from Cook County, IL," CESifo Working Paper Series 7800, CESifo.
    • Handle: RePEc:ces:ceswps:_7800
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    References listed on IDEAS

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    Cited by:

    1. Robert Collinson & John Eric Humphries & Nicholas Mader & Davin Reed & Daniel Tannenbaum & Winnie van Dijk, 2024. "Eviction and Poverty in American Cities," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 139(1), pages 57-120.
    2. Ströbel, Johannes & Howell, Sabrina & Kuchler, Theresa & Snitkof, David, 2021. "Racial Disparities in Access to Small Business Credit: Evidence from the Paycheck Protection Program," CEPR Discussion Papers 16623, C.E.P.R. Discussion Papers.
    3. Fetzer, Thiemo & Sen, Srinjoy & Souza, Pedro CL, 2019. "Housing insecurity, homelessness and populism: Evidence from the UK," CAGE Online Working Paper Series 444, Competitive Advantage in the Global Economy (CAGE).
    4. Kroeger, Sarah & Monahan, Tess & Perry, Brendan, 2022. "How Can Research Improve Foster Care Policy and Practice?," MPRA Paper 113969, University Library of Munich, Germany.
    5. Diamond, Rebecca & Guren, Adam & Tan, Rose, 2020. "The Effect of Foreclosures on Homeowners, Tenants, and Landlords," Research Papers 3877, Stanford University, Graduate School of Business.
    6. Sabrina T. Howell & Theresa Kuchler & David Snitkof & Johannes Stroebel & Jun Wong, 2021. "Lender Automation and Racial Disparities in Credit Access," NBER Working Papers 29364, National Bureau of Economic Research, Inc.
    7. Sarah Miller & Laura R. Wherry & Diana Greene Foster, 2023. "The Economic Consequences of Being Denied an Abortion," American Economic Journal: Economic Policy, American Economic Association, vol. 15(1), pages 394-437, February.
    8. Agan, Amanda & Doleac, Jennifer & Harvey, Anna, 2021. "Misdemeanor Prosecution," IZA Discussion Papers 14234, Institute of Labor Economics (IZA).
    9. Kay Jowers & Christopher Timmins & Nrupen Bhavsar & Qihui Hu & Julia Marshall, 2021. "Housing Precarity & the COVID-19 Pandemic: Impacts of Utility Disconnection and Eviction Moratoria on Infections and Deaths Across US Counties," NBER Working Papers 28394, National Bureau of Economic Research, Inc.
    10. Bartalotti, Otávio & Kédagni, Désiré & Possebom, Vitor, 2023. "Identifying marginal treatment effects in the presence of sample selection," Journal of Econometrics, Elsevier, vol. 234(2), pages 565-584.
    11. Max Gross & E. Jason Baron, 2022. "Temporary Stays and Persistent Gains: The Causal Effects of Foster Care," American Economic Journal: Applied Economics, American Economic Association, vol. 14(2), pages 170-199, April.
    12. David A. Hoffman & Anton Strezhnev, 2022. "Leases as Forms," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 19(1), pages 90-134, March.
    13. Dean Corbae & Andrew Glover & Michael Nattinger, 2023. "Equilibrium Evictions," Research Working Paper RWP 23-03, Federal Reserve Bank of Kansas City.
    14. Vitor Possebom, 2021. "Crime and Mismeasured Punishment: Marginal Treatment Effect with Misclassification," Papers 2106.00536, arXiv.org, revised Jul 2023.
    15. Elior Cohen, 2022. "The Effect of Housing First Programs on Future Homelessness and Socioeconomic Outcomes," Research Working Paper RWP 2022-03, Federal Reserve Bank of Kansas City.
    16. David C. Phillips, 2020. "Measuring Housing Stability With Consumer Reference Data," Demography, Springer;Population Association of America (PAA), vol. 57(4), pages 1323-1344, August.
    17. Fesko, Luke, 2023. "First lead, now no bed? The unintended impacts of lead abatement laws on eviction," Journal of Environmental Economics and Management, Elsevier, vol. 117(C).
    18. Kotikula, Aphichoke & Raza, Wameq Azfar, 2021. "Housing ownership Gender differences in Dhaka, Bangladesh," Land Use Policy, Elsevier, vol. 110(C).
    19. Sébastien Willis, 2022. "Workplace Segregation and the Labour Market Performance of Immigrants," CESifo Working Paper Series 9895, CESifo.

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    More about this item

    Keywords

    evictions; financial distress; poverty;
    All these keywords.

    JEL classification:

    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • H00 - Public Economics - - General - - - General
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General

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