Staff Reports
Credit Access and Mobility during the Flint Water Crisis
Number 960
February 2021

JEL classification: H84, R20

Authors: Nicole Gorton and Maxim L. Pinkovskiy

How do credit-constrained communities cope with the financial consequences of environmental crises? Beginning in April 2014, the residents of Flint, Michigan, were exposed to lead-contaminated water resulting from a series of governmental missteps. In this paper, we use the spatial distribution of lead and galvanized pipes in Flint to study the effect of the crisis on households’ financial health, including loan balances, repayment of outstanding debt, and Equifax Risk Scores, as well as on household mobility. We find that relatively more affected households, as measured by exposure to lead pipes, experienced a modest increase in the balance and frequency of past due loans. Equifax Risk Scores declined slightly on average, but more so at the bottom of the Risk Score distribution. In addition, we find that there was no effect on mobility out of the state or county, but that more affected households were more likely to move within the city when the crisis began, away from lead-pipe-dense areas.

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AUTHOR DISCLOSURE STATEMENT(S)
Nicole Gorton
Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports/index.html. The author declares that she has no further relevant or material financial interests that relate to the research described in this paper.

Maxim Pinkovskiy
Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports/index.html. The author declares that he has no further relevant or material financial interests that relate to the research described in this paper.
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