Economic Distress and Voting: Evidence from the Subprime Mortgage Crisis

Abstract

Roughly 7 million Americans lost homes to foreclosure during the Great Recession. Despite claims that the subprime mortgage crisis helped fuel recent political turmoil in the U.S., we lack systematic empirical evidence about the effects of this unprecedented spike in home foreclosures on American elections. We combine nationwide deed-level public records data on home foreclosures with election data and administrative voter data to examine the effects of home foreclosures on electoral outcomes and on individual voter turnout. At the aggregate level, county-level difference-in-differences estimates show that counties that suffered larger increases in foreclosures did not punish or reward members of the incumbent president’s party more than less affected counties. At the individual level, merging the Ohio voter file with foreclosure data, difference-in-differences estimates reveal that Ohioans whose homes were foreclosed on were somewhat less likely to turn out to vote, particularly when foreclosures occurred close to election day. The findings cast doubt on the claim that individual-level economic distress during the Great Recession directly activated angry voters, and raise questions about the posited causal link between economic distress and the electoral punishment of incumbents.