Rent Control and Unemployment Duration

Svarer, Michael; Rosholm, Michael; Munch, Jakob Roland

doi:10.2139/ssrn.429965

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Rent Control and Unemployment Duration

28 Pages Posted: 16 Sep 2003

See all articles by Michael Svarer

Michael Svarer

Aarhus University - Department of Economics and Business Economics; Institute for the Study of Labor (IZA)

Michael Rosholm

Aarhus University - Department of Economics and Business Economics; IZA Institute of Labor Economics; Amternes og Kommunernes Forskningsinstitut (AKF)

Jakob Roland Munch

University of Copenhagen - Department of Economics; Center for Economic and Business Research (CEBR)

Date Written: August 2003

Abstract

In this paper we investigate whether rent control affects the functioning of the labour market. Particularly, we focus on the effect of rent control on the length of individual unemployment duration. Theoretically, the effect is ambiguous. Rent control reduces housing mobility and could very well spill-over to mobility in the labour market. On the other hand to maintain their rent control benefits unemployed individuals are presumably less demanding when accepting a job in the local labour market. Based on a rich Danish data set we investigate the empirical contents of the issue, and find results that are in clear accordance with the theoretical predictions.

Keywords: rent control, unemployment duration, search model

JEL Classification: C41, J61, J64, D45, L51

Suggested Citation: Suggested Citation

Svarer, Michael and Rosholm, Michael and Munch, Jakob Roland, Rent Control and Unemployment Duration (August 2003). Available at SSRN: https://ssrn.com/abstract=429965 or http://dx.doi.org/10.2139/ssrn.429965