When I was in grad school, I did a project with an advocacy group that helped people who were faced with evictions. They were interested in studying the effects of the COVID-19 eviction moratorium.
The moratorium was in effect temporary housing assistance for people who could not pay their rent. It still allowed for some evictions in situations where tenants either used the property for illegal activities or severely damaged the property, but overall the policy acted as temporary housing assistance for hundreds of thousands of people across the country.
The question we were looking to uncover was how much evictions rose after the moratorium was lifted. If they were higher than pre-pandemic levels, we thought that might be because the moratorium just delayed their eviction for a short time rather than actually reducing eviction rates.
If eviction rates returned to pre-pandemic levels, we suspected that it would be because this temporary assistance helped get people back on their feet, and avoid future eviction.
Unfortunately, we didn't come to a decisive conclusion. I was working on this project in the Fall of 2022, and there just wasn’t enough data yet to be sure either way. At first glance though, it seemed like there was not going to be a significant rise in evictions.
The real question that at the heart of this project that I wasn’t able to answer is how far temporary assistance can go. If you give someone rent money for one month, does that enable them to find a way to pay themselves the next?
In January of this year, researchers helped answer this question. In a paper written by researchers at Notre Dame university and the Census Bureau, they explain how emergency financial assistance appears to help increase earnings for some individuals.
These researchers exploit variation in the availability of emergency resources in order to compare similar families that receive assistance to those that do not. They found no evidence to suggest that families that receive assistance decrease their labor supply, in effect replacing income from working with emergency assistance dollars. Instead, they found that for the lowest earners, this emergency assistance can lead to increases in employment and earnings.
This result has extremely important policy implications. Short-term financial emergencies can have severe consequences. Things like homelessness and unemployment have long-lasting effects that the public sector ends up paying the bill for. If we can use short-term assistance to help get people back on their feet, then we not only improve conditions for struggling people in the short-term, but we can also avoid much more costly problems down the road.
This new research helps highlight the fact that when there is a strong social safety net, we can improve long-run outcomes for people facing short-term struggles. This paper demonstrates that people who use emergency assistance do not begin to rely on it and use it as a replacement for their own income. Instead, we find that people who receive emergency assistance use it as a springboard to propel themselves into a more stable financial situation.