Housing Assistance and Labor Supply: The Case of Rent Control

Housing affordability pressures have renewed interest in rent regulation, yet little is known about how rent control affects tenants' labor supply decisions. This paper studies the labor-supply effects of rent stabilization in New York City, a setting with a long history of rent regulation. Using the New York City Housing and Vacancy Survey (NYCHVS), which provides administratively verified rent-stabilization status and detailed labor market outcomes, we estimate the impact of rent stabilization on labor supply. To address nonrandom selection into rent-stabilized units, we adopt an instrumental variables strategy that exploits quasi-random variation in the relative availability of vacant rent-stabilized units at the time of move-in. Our preferred IV estimates indicate substantial reductions in hours worked: rent stabilization lowers weekly hours by 7.7 hours on average, or 20 percent, when including nonworkers, and by 5.6 hours, or 13 percent, among employed tenants. A comprehensive set of robustness and validity checks supports these findings. We further estimate marginal treatment effects (MTE) to assess whether the labor-supply disincentive varies with unobserved resistance to entering rent stabilization. The MTE curves are approximately flat, indicating no essential heterogeneity: the IV estimates generalize beyond compliers to the average treated and untreated tenants.