Does Rent Regulation Affect Tenant Unemployment? Evidence from New York City
Johns Hopkins Carey Business School Research Paper No. 22-04
57 Pages Posted: 16 Feb 2022 Last revised: 27 Apr 2023
Date Written: March 1, 2022
This paper examines the impact of rent regulation on tenants' unemployment in New York City. We provide evidence that rent stabilization increases tenants' unemployment by over five percentage points using data from 2002 and 2017. To address endogeneity concerns, we employ an instrumental variable strategy that exploits the local historical availability of rent-stabilized units when tenants move in as an exogenous source of variation for occupying a rent-stabilized unit. We also develop a job-search model to explain the underlying mechanisms of rent regulation's unemployment effects. Our findings underscore the need for policymakers to consider the unintended consequences of rent regulation.
Keywords: Rent Regulation, Rent Stabilization, Tenant Unemployment, Job Search Model, Policy Awareness, New York City
JEL Classification: H70, L51, R21, R28, J60
Suggested Citation: Suggested Citation