Recent Research

  • WP 2019

    John Eric Humphries, Nick Mader, Daniel Tannenbaum, and Winnie van Dijk.

    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.
  • WP 2018

    John Eric Humphries, Working Paper, 2018.

    This paper investigates the determinants and consequences of entry into and exit from self-employment over the life cycle. It integrates traditional models of dynamic career choice that feature human capital investment with models of business start-up that feature costly capital investment. Applying machine learning methods to matched worker-firm data from Sweden, I isolate seven distinct patterns of participation in self-employment as part of broader life-cycle employment profiles. These patterns are rationalized using a dynamic Roy model with both human capital and physical capital. I estimate the structural model and use it to evaluate policies designed to promote self-employment. Cognitive and non-cognitive skills, education, and past work experience are important determinants of which types of businesses individuals start, how much capital they employ, and how long they remain in self-employment. Subsidies that incentivize self-employment are generally ineffective, both in terms of promoting long-lasting firms and in terms of improving the welfare and earnings of those induced to enter self-employment.
  • WP 2018

    John Eric Humphries, Juanna Joensen, and Gregory Veramendi, Working Paper, 2018.

    The process of skill specialization starts before college, with different skills affecting students' choice of major and later labor market returns. This paper studies the role of multi-dimensional ability and high school track choices in college preparedness and labor market outcomes. We do so by estimating a sequential choice model of education using Swedish administrative data. Individuals sort at each stage based on prior choices and three dimensions of ability: cognitive, interpersonal, and grit. We find strong absolute and differential sorting on abilities in both high school and college choices. Both abilities and high school track choices are important determinants of college enrollment, college major choice, college graduation, and labor market outcomes. The labor market returns to abilities and high school track choices vary considerably by degree and major. Not accounting for multidimensional abilities and high school choices can overstate the role of preferences and understate selection on gains and the heterogeneous returns to different abilities across different college majors. While high school track choices tend to exacerbate inequality, we show that policies encouraging students to take more challenging high school tracks can help ameliorate it.
  • JPE 2018

    James J. Heckman, John Eric Humphries,and Gregory Veramendi, published in the Journal of Political Economy, 2018.

    This paper estimates returns to education using a dynamic model of educational choice that synthesizes approaches in the structural dynamic discrete choice literature with approaches used in the reduced form treatment effect literature. It is an empirically robust middle ground between the two approaches which estimates economically interpretable and policy-relevant dynamic treatment effects that account for heterogeneity in cognitive and non-cognitive skills and the continuation values of educational choices. Graduating college is not a wise choice for all. Ability bias is a major component of observed educational differentials. For some, there are substantial causal effects of education at all stages of schooling.