Household Finance Shapes Political Participation: Evidence from Mortgage Refinancing

We study mortgage refinancing during the Great Recession, a period marked by a dislocated housing market, major government programs, and large potential gains from refinancing. Using quasi-experimental variation from movements in mortgage rates and eligibility cutoffs in HARP, we show that borrowers who refinanced between 2009 and 2012 were more likely to vote in the 2012 general election than otherwise similar borrowers who did not refinance. The increase in turnout is concentrated among households that experienced larger payment reductions and among politically independent voters. Our findings show that policy-induced mortgage relief can extend beyond household balance sheets into the political sphere and highlight the deep connections between finance and politics.