Does Rent Regulation Affect Tenant Unemployment? Evidence from New York City

81 Pages Posted: 16 Feb 2022 Last revised: 7 Mar 2022

See all articles by Hanchen Jiang

Hanchen Jiang

University of North Texas - Department of Economics

Luis Quintero

Johns Hopkins University - Carey Business School

Xi Yang

University of North Texas

Date Written: March 2, 2022

Abstract

We study the effect of rent stabilization in NYC on tenant unemployment from 2002 to 2017. We show rent stabilization increases tenants’ unemployment by six percentage points, more than double the average unemployment rate during the study period. Moreover, the effect is concentrated in traditionally privileged groups. We address the potential policy’s endogeneity with an instrumental variable that captures neighborhood-level rent-stabilized units’ relative vacancy when the tenant moves in. We develop a job-search model with rent stabilization that rationalizes the disincentive mechanism behind this effect. We confirm empirically heterogeneous effects across groups of workers in the directions suggested by the model.

Keywords: Rent Regulation, Rent Stabilization, Tenant Unemployment, Job Search Model, Policy Awareness, New York City

JEL Classification: H70, L51, R21, R28, J60

Suggested Citation

Jiang, Hanchen and Quintero, Luis and Yang, Xi, Does Rent Regulation Affect Tenant Unemployment? Evidence from New York City (March 2, 2022). Johns Hopkins Carey Business School Research Paper No. 22-04, Available at SSRN: https://ssrn.com/abstract=4034964 or http://dx.doi.org/10.2139/ssrn.4034964

Hanchen Jiang (Contact Author)

University of North Texas - Department of Economics ( email )

Denton, TX 76203-1457
United States

Luis Quintero

Johns Hopkins University - Carey Business School ( email )

100 International Drive
Baltimore, MD 21202
United States

Xi Yang

University of North Texas ( email )

Denton, TX 76203-1457
United States

HOME PAGE: http://https://xiyangecon.weebly.com/

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