Evicted from Opportunity: Labor Market Effects of Housing Loss in High-Productivity Cities

• In Event: Housing and Human Capital

Abstract

How important is stable housing near high paying jobs for long term career progress? Credible evidence is scarce because while job displacements are reasonably common, residential displacement is rare and rarely random. We exploit Ellis Act withdrawals that remove entire buildings from San Francisco’s rent-controlled stock and require all units to be vacated, limiting tenant-level selection. We use administrative data on earnings and employment from the LEHD and IRS and link them to addresses, property records, and other records for over 1,000 withdrawals spanning 1998-2018, and compare displaced tenants to residents of nearby rent-controlled buildings in a stacked event study design. Six years after eviction, displaced individuals earn about $13,000 less annually (approximately 20 percent of baseline earnings), live in substantially lower-value housing, and reside in lower-income neighborhoods. Losses concentrate among younger and lower-income workers and persist even among those who move only 5 to 25km away, implying steeply localized returns to place. Displaced workers end up at smaller, lower-paying firms with longer commutes: losing a foothold in a high-opportunity urban core durably redirects careers. Simulated central-city evictions qualitatively reproduce earnings losses, especially for young workers. Matching the empirical magnitudes likely requires the city center to offer an earnings-growth premium through stronger matching, faster learning, and faster transitions to more productive firms. Our findings underscore several policy-relevant points. First, access to stable, affordable housing is particularly important for helping young workers advance in their careers. Second, residential displacement has negative earnings effects even when the eviction is not due to the tenant's behavior. Stable housing is thus not just important for tenants at risk of an at-fault eviction, but for all tenants. Third, since the effects of displacement are large and persistent, there is potentially a large social welfare benefit to exploring policies like tenants’ insurance to help the displaced.

Author

• Brian James Asquith, W. E. Upjohn Institute for Employment Research
  Presenting Author