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Rent Control and Unemployment Duration

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  • Svarer, Michael

    (Aarhus University)

  • Rosholm, Michael

    (Aarhus University)

  • Munch, Jakob R.

    (University of Copenhagen)

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.

Suggested Citation

  • Svarer, Michael & Rosholm, Michael & Munch, Jakob R., 2003. "Rent Control and Unemployment Duration," IZA Discussion Papers 842, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp842
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    References listed on IDEAS

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    Cited by:

    1. Yuval Kantor & Peter Nijkamp & Jan Rouwendal, 2013. "Homeownership, Unemployment and Commuting Distances," Tinbergen Institute Discussion Papers 13-144/VIII, Tinbergen Institute.
    2. Claire Dujardin & Florence Goffette-Nagot, 2009. "Does public housing occupancy increase unemployment?," Journal of Economic Geography, Oxford University Press, vol. 9(6), pages 823-851, November.
    3. Chen, Ruoyu & Jiang, Hanchen & Quintero, Luis E., 2023. "Measuring the value of rent stabilization and understanding its implications for racial inequality: Evidence from New York City," Regional Science and Urban Economics, Elsevier, vol. 103(C).
    4. Christian A. L. Hilber & Teemu Lyytikäinen, 2012. "The Effect of the UK Stamp Duty Land Tax on Household Mobility," SERC Discussion Papers 0115, Centre for Economic Performance, LSE.
    5. Munch, Jakob Roland & Rosholm, Michael & Svarer, Michael, 2008. "Home ownership, job duration, and wages," Journal of Urban Economics, Elsevier, vol. 63(1), pages 130-145, January.
    6. Ligia Topan & Miguel Jerez & Sonia Sotoca, 2020. "The impact of oil prices on products groups inflation: is the effect asymmetric?," Documentos de Trabajo del ICAE 2020-01, Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales, Instituto Complutense de Análisis Económico.
    7. Rosholm, Michael & Staghøj, Jonas & Svarer, Michael & Hammer, Bo, 2006. "A Danish Profiling System," Nationaløkonomisk tidsskrift, Nationaløkonomisk Forening, vol. 2006(1), pages 209-229.
    8. 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.
    9. O’Toole, Conor & Martinez-Cillero, Maria & Ahrens, Achim, 2021. "Price regulation, inflation, and nominal rigidity in housing rents," Journal of Housing Economics, Elsevier, vol. 52(C).
    10. Arnott, Richard & Shevyakhova, Elizaveta, 2014. "Tenancy rent control and credible commitment in maintenance," Regional Science and Urban Economics, Elsevier, vol. 47(C), pages 72-85.
    11. Brian J. Asquith, 2022. "The Effects of an Ellis Act Eviction on Neighborhood Socioeconomic Status," Upjohn Working Papers 22-374, W.E. Upjohn Institute for Employment Research.
    12. Mark A. C. Kattenberg & Wolter H. J. Hassink, 2017. "Who Moves Out of Social Housing? The Effect of Rent Control on Housing Tenure Choice," De Economist, Springer, vol. 165(1), pages 43-66, March.
    13. Larsen, Morten Marott & Pilegaard, Ninette & Ommeren, Jos Van, 2008. "Congestion and residential moving behaviour," Regional Science and Urban Economics, Elsevier, vol. 38(4), pages 378-387, July.
    14. Kholodilin, Konstantin A., 2024. "Rent control effects through the lens of empirical research: An almost complete review of the literature," Journal of Housing Economics, Elsevier, vol. 63(C).
    15. Harminder Battu & Ada Ma & Euan Phimister, 2008. "Housing Tenure, Job Mobility and Unemployment in the UK," Economic Journal, Royal Economic Society, vol. 118(527), pages 311-328, March.
    16. Shing-Yi Wang, 2011. "State Misallocation and Housing Prices: Theory and Evidence from China," American Economic Review, American Economic Association, vol. 101(5), pages 2081-2107, August.
    17. Morten Skak & Gintautas Bloze, 2013. "Rent Control and Misallocation," Urban Studies, Urban Studies Journal Limited, vol. 50(10), pages 1988-2005, August.
    18. Eerola, Essi & Saarimaa, Tuukka, 2018. "Delivering affordable housing and neighborhood quality: A comparison of place- and tenant-based programs," Journal of Housing Economics, Elsevier, vol. 42(C), pages 44-54.
    19. Stephen Whelan, 2009. "The Dynamics of Public Housing Tenure in Australia," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 42(2), pages 155-176, June.

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    More about this item

    Keywords

    search model; unemployment duration; rent control;
    All these keywords.

    JEL classification:

    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • D45 - Microeconomics - - Market Structure, Pricing, and Design - - - Rationing; Licensing
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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