Does rent control increase tenant unemployment?

Hanchen Jiang, Luis Quintero and Xi Yang

Journal of Urban Economics, 2025, vol. 149, issue C

Abstract: This paper proposes and tests the hypothesis that rent control increases tenant unemployment. Using microdata from New York City between 2002 and 2017, we find that rent stabilization increases tenants’ probability of unemployment by more than four percentage points, and the effect is especially pronounced among tenants with unearned income. To address endogeneity concerns, we employ an instrumental variable strategy that exploits the local relative availability of rent-stabilized units at the time of move-in as an exogenous source of variation. We propose a job-search model to explain the disincentive channel underlying our results. These findings highlight the potential unintended consequences of rent control.

Keywords: Rent control; Rent stabilization; Unemployment; Job search; Housing affordability (search for similar items in EconPapers)
JEL-codes: J6 L5 R2 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:juecon:v:149:y:2025:i:c:s0094119025000555

DOI: 10.1016/j.jue.2025.103790

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