Eviction and Poverty in American Cities

More than two million US households have an eviction case filed against them each year. New research by Yale Professors John Eric Humphries and Winnie van Dijk and co-authors explores the long-term causal impacts of evictions.

What are the economic consequences of evictions? In new research forthcoming in the Quarterly Journal of Economics, Yale professors John Eric Humphries and Winnie van Dijk and co-authors show that:

• Individuals and families going through the eviction court process are often facing additional adversities, and evictions are typically precipitated by job loss or declining health up to two years prior.
• Evictions increase homelessness, reduce tenants’ earnings, and impede access to credit.
• Black and female tenants are more likely to face negative housing and employment outcomes following an eviction.

Research Context: Among OECD countries, the US has the highest number of evictions per renting household, amounting to over two million households a year. While the negative consequences of evictions have been explored through anthropological and sociological case studies—one notable example is Matthew Desmond’s work, Evicted—there has been little rigorous quantitative analysis that sheds light on tenants’ economic outcomes. In most eviction studies to date, it has been difficult to track tenant outcomes following an eviction because eviction court data and administrative data are not linked. It is also difficult to distinguish between the effects of an eviction and the effects of correlated crises such as unemployment or declining health that commonly precede an eviction.

Data and Analysis: To overcome these challenges, Humphries, van Dijk, and their colleagues constructed a new dataset that links administrative and commercial data to eviction court records from two large urban areas, New York, NY, and Cook County, IL (which contains Chicago). The administrative records included information on earnings, employment, residential address histories, interactions with homelessness systems, hospital visits, and credit bureau records. This first-of-its-kind dataset allowed the researchers to track tenants’ outcomes in the years before and after appearances in court. To identify the causal impact of eviction orders, the researchers used an instrumental variables (IV) design that relies on the random assignment of cases to judges who systematically vary in their tendency to evict. Through this analysis, they provide the first quasi-experimental evidence of the impacts of eviction rulings on a number of socioeconomic outcomes.

Results: Evictions led to multiple—and often compounding—negative outcomes. Evictions led to short-run increases in homelessness and residential mobility. They also led to declines in financial health and credit scores, as well as increases in the number of hospital visits.

Eviction orders often leave tenants with little time to find new housing arrangements and prior eviction orders can also make it harder to find new housing since many landlords screen potential tenants’ rental history. The study showed that an eviction order increased the probability of using an emergency shelter by 3.4 percentage points in the year following the eviction, representing a more than 300% increase relative to those who are not evicted. The effects on tenants’ interactions with homelessness services even persisted into the second year after eviction. These estimates are substantially larger for Black and female tenants, for which the probability of interacting with the homelessness system up to two years after eviction was 5.7 and 6.8 percentage points, respectively. Relative to those who are not evicted, this represents a 467% increase for Black tenants and a 307% increase for female tenants.

Annual earnings following an eviction decreased by an average of roughly $1,300 in the first year, and $2,400 in the second year, amounting to a nearly 15 percent drop in income (from a sample baseline of $17,200 per year). These effects are more pronounced in Cook County than in New York, and also stronger for Black and female tenants in both locations.

Individuals and families going through the eviction court process are often facing additional adversities, and this research shows that evictions are typically precipitated by job loss or declining health up to two years prior. Future research could evaluate both eviction-preventive policies, such as emergency financial assistance and free legal aid, as well as eviction-responsive policies, such as homelessness diversion programs and subsidized housing.

Research summary by: Henri Cornec