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Relieving Financial Distress Increases Voter Turnout: Evidence from the Mortgage Market

Author

Listed:
  • Haoyang Liu
  • W. Ben McCartney
  • Rodney Ramcharan
  • Calvin Zhang
  • Xiaohan Zhang

Abstract

Borrowers who refinanced mortgages between 2009 and 2012, a period marked by mortgage distress and dislocated housing markets, but also falling interest rates, were more likely to vote in the 2012 general election than similar borrowers who did not refinance. We exploit an eligibility cutoff in the Home Affordable Refinance Program (HARP) to identify a causal relationship. Consistent with the resource model of voting, the effect of refinancing on turnout is strongest among borrowers with lower incomes and larger debt service reductions. Our findings shed new light on an important channel linking economic conditions and political outcomes.

Suggested Citation

  • Haoyang Liu & W. Ben McCartney & Rodney Ramcharan & Calvin Zhang & Xiaohan Zhang, 2025. "Relieving Financial Distress Increases Voter Turnout: Evidence from the Mortgage Market," Working Papers 2517, Federal Reserve Bank of Dallas.
    • Handle: RePEc:fip:feddwp:99960
    DOI: 10.24149/wp2517
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    More about this item

    Keywords

    household finance; mortgages; interest rates; political participation; voter turnout;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • R20 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - General

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