Moving to Opportunity? The Geography of the Foreclosure Crisis and the Importance of Location

52 Pages Posted: 2 May 2018

See all articles by Christos Makridis

Christos Makridis

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Michael Ohlrogge

New York University School of Law

Date Written: April 14, 2018

Abstract

Over six million households experienced foreclosure during the financial crisis. Where did they move, how did they fare, and why? First, we create a new longitudinal dataset between 2006 and 2011 from their point of foreclosure to their relocation. Despite significant heterogeneity in mobility outcomes, we find that individuals move to, on average, higher quality locations. Second, we quantify the contributions of (i) local labor market conditions, (ii) local composition effects, and (iii) state foreclosure institutions towards mobility outcomes. Third, we find that the return to moving to another county following foreclosure, relative to census tracts within-county, is 2.3%.

Keywords: foreclosure, financial crisis, mobility, unemployment

JEL Classification: J61, J24, R31, R51

Suggested Citation

Makridis, Christos and Ohlrogge, Michael, Moving to Opportunity? The Geography of the Foreclosure Crisis and the Importance of Location (April 14, 2018). Available at SSRN: https://ssrn.com/abstract=3162905 or http://dx.doi.org/10.2139/ssrn.3162905

Christos Makridis (Contact Author)

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

100 Main Street
E62-416
Cambridge, MA 02142
United States

Michael Ohlrogge

New York University School of Law ( email )

40 Washington Square South
New York, NY 10012-1099
United States

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