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Rent Control and Unemployment Duration

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  • Michael Svarer

    (Department of Economics, University of Aarhus)

  • Michael Rosholm

    (Department of Economics, University of Aarhus)

  • Jacob Roland Munch

    (Danish Economic Council)

Abstract

In this paper we investigate whether rent control affects the functioning of th labour market. Particularly, we focus on the effect of rent control on the length of individual unemployment duration. Theoretically, the effect is ambigious. 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.

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File URL: http://www.econ.ku.dk/cam/wp0910/wp0203/2003-07.pdf/
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Bibliographic Info

Paper provided by University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics in its series CAM Working Papers with number 2003-07.

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Length: 23 pages
Date of creation: Jun 2003
Date of revision:
Handle: RePEc:kud:kuieca:2003_07

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Keywords: rent control; unemployment duration; search model;

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References

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  1. Hans Lind, 2001. "Rent Regulation: A Conceptual And Comparative Analysis," International Journal of Housing Policy, Taylor & Francis Journals, Taylor & Francis Journals, vol. 1(1), pages 41-57.
  2. Decressin, Jorg & Fatas, Antonio, 1995. "Regional labor market dynamics in Europe," European Economic Review, Elsevier, Elsevier, vol. 39(9), pages 1627-1655, December.
  3. Peter Jensen & Michael Svarer, 2003. "Short- and long-term unemployment: How do temporary layoffs affect this distinction?," Empirical Economics, Springer, Springer, vol. 28(1), pages 23-44, January.
  4. Jakob Roland Munch & Michael Svarer, . "Rent Control and Tenancy Duration," Economics Working Papers, School of Economics and Management, University of Aarhus 2001-7, School of Economics and Management, University of Aarhus.
  5. Alston, Richard M & Kearl, J R & Vaughan, Michael B, 1992. "Is There a Consensus among Economists in the 1990's?," American Economic Review, American Economic Association, American Economic Association, vol. 82(2), pages 203-09, May.
  6. Arnott, Richard & Igarashi, Masahiro, 2000. "Rent control, mismatch costs and search efficiency," Regional Science and Urban Economics, Elsevier, Elsevier, vol. 30(3), pages 249-288, May.
  7. Anna M. Hardman & Yannis M. Ioannides, 1999. "Residential Mobility and the Housing Market in a Two-sector Neoclassical Growth Model," Discussion Papers Series, Department of Economics, Tufts University, Department of Economics, Tufts University 9915, Department of Economics, Tufts University.
  8. Richard Arnott, 1997. "Rent Control," Boston College Working Papers in Economics, Boston College Department of Economics 391., Boston College Department of Economics.
  9. Hans Lind, 2001. "Rent Regulation: A Conceptual And Comparative Analysis," European Journal of Housing Policy, Taylor and Francis Journals, Taylor and Francis Journals, vol. 1(1), pages 41-57, April.
  10. Gyourko, Joseph & Linneman, Peter, 1990. "Rent controls and rental housing quality: A note on the effects of New York City's old controls," Journal of Urban Economics, Elsevier, vol. 27(3), pages 398-409, May.
  11. Edward L. Glaeser & Erzo F. P. Luttmer, 2003. "The Misallocation of Housing Under Rent Control," American Economic Review, American Economic Association, American Economic Association, vol. 93(4), pages 1027-1046, September.
  12. Paul Gregg & Stephen Machin & Alan Manning, 2004. "Mobility and Joblessness," NBER Chapters, in: Seeking a Premier Economy: The Economic Effects of British Economic Reforms, 1980-2000, pages 371-410 National Bureau of Economic Research, Inc.
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Citations

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Cited by:
  1. Jakob Roland Munch & Michael Rosholm & Michael Svarer, 2006. "Home Ownership, Job Duration, and Wages," CAM Working Papers, University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics 2006-08, University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics.
  2. Michael Rosholm & Michael Svarer & Bo Hammer, 2004. "A Danish Profiling System," CAM Working Papers, University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics 2004-22, University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics.
  3. Claire Dujardin & Florence Goffette-Nagot, 2009. "Does public housing occupancy increase unemployment?," Journal of Economic Geography, Oxford University Press, Oxford University Press, vol. 9(6), pages 823-851, November.
  4. Yuval Kantor & Peter Nijkamp & Jan Rouwendal, 2013. "Homeownership, Unemployment and Commuting Distances," Tinbergen Institute Discussion Papers 13-144/VI, Tinbergen Institute.
  5. Duebel, Hans-Joachim & Brzeski, W. Jan & Hamilton, Ellen, 2006. "Rental choice and housing policy realignment in transition : post-privatization challenges in the Europe and Central Asia region," Policy Research Working Paper Series 3884, The World Bank.
  6. Morten Marott Larsen & Ninette Pilegaard & Jos van Ommeren, 2004. "Congestion and Residential Moving Behaviour," Tinbergen Institute Discussion Papers 04-096/3, Tinbergen Institute.
  7. Richard J. Arnott & Elizaveta Shevyakhova, 2014. "Tenancy Rent Control and Credible Commitment in Maintenance," CESifo Working Paper Series 4608, CESifo Group Munich.
  8. Shing-Yi Wang, 2011. "State Misallocation and Housing Prices: Theory and Evidence from China," American Economic Review, American Economic Association, American Economic Association, vol. 101(5), pages 2081-2107, August.
  9. Christian A. L. Hilber & Teemu Lyytikäinen, 2012. "The Effect of the UK Stamp Duty Land Tax on Household Mobility," SERC Discussion Papers, Spatial Economics Research Centre, LSE 0115, Spatial Economics Research Centre, LSE.

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