Each year, more than 2 million U.S. households face the prospect of eviction, a disruptive event widely believed to trigger increased financial strain. A new study finds that by the time most tenants land in eviction court, they have already suffered years of intensifying financial distress.
The study, a National Bureau of Economics Research working paper by Yale economist John Eric Humphries and coauthors Nicholas Mader, Daniel Tannenbaum, and Winnie van Dijk, provides the first in-depth economic analysis of the effects of eviction on people’s financial status. Based on 17 years of court records from eviction cases in Cook County, Illinois — comprising about 30,000 cases per year — it provides new evidence on how eviction affects financial distress, residential mobility, and the quality of neighborhoods. The findings can help guide the development of policy interventions meant to ease financial hardships for low-income tenants at risk of eviction, Humphries said.
“We found that eviction is a consequence of other negative factors that are already mounting well before an eviction case is filed,” said Humphries, an assistant professor of economics. “When it comes to helping struggling tenants, if you intervene after an eviction order is granted, then you will be catching them at the height of the crisis, not at the beginning. Earlier interventions are likely to be more effective.”
The researchers linked the court records, which ranged from 2000 to 2016, with credit bureau and payday loan data. They found that tenants averaged about $3,000 in debt in collections — past-due debts turned over to collection agencies — four years before eviction cases were filed against them. The debt increased by about $1,000 for those threatened with eviction during the two years prior to going to court and the two years after their cases were adjudicated. Average debt in collections is about $200 higher for those who are evicted than for tenants who are allowed to remain in their homes after appearing in court, according to the study.
The analysis found no causal impact from eviction on residential mobility — how often people move — or poverty levels in the neighborhoods where they live. The researchers discovered that evictions caused a small increase in people’s already considerable financial strain.
“If you are evicted, we find that as a result you are likely to have a little more debt, slightly lower credit scores,” said van Dijk, a postdoctoral research fellow at the University of Chicago Becker Friedman Institute. “Considering the baseline level of financial distress occurring four years before an eviction case is filed, the economic consequences of being evicted appear fairly moderate. That doesn’t mean policymakers shouldn’t be concerned about eviction, but it suggests that merely averting an eviction in court is unlikely to alleviate the severe financial hardship so many low-income tenants experience.”
Desmond’s striking narrative and ethnographic research drew the attention of policymakers interested in devising measures to reduce evictions. In the initial stages of their research, Humphries and his coauthors realized there was little economics research or relevant data on the subject.
The Cook County records they collected showed that evictions are a persistent aspect of Chicago’s housing market. While they occur across the city, they are concentrated in the city’s poorer neighborhoods located on its south and southwest sides. More than 44% of evictions occurred in areas of Chicago where more than 20% of residents live below the poverty line.
The research team constructed a database that integrates the Cook County court records with data covering an array of issues, including income, children’s schooling outcomes, homelessness, lead inspections, receipt of public assistance, credit, and payday loan usage. The current working paper describes the first results in this research stream. Subsequent work will study the relationship between eviction and children’s educational success and the association between eviction and lead hazard mediation.