Do urban regulations exacerbate rural-urban inequality? Evidence from rent control in India

Rent control influences more than housing markets. Using India—a country with heavily regulated housing markets—as a case study, we examine how shifts from pro-tenant to pro-landlord rent control and eviction laws impact rural–urban migration and labor markets. Additionally, we explore potential mechanisms to explain our results on migration. Relaxing rent control leads to higher rents and dampens rural–urban migration, while easing eviction laws facilitates the conversion of rental units into owner-occupied housing and increases the prevalence of “marriage migrants.” The impact of relaxing rent control and eviction laws on rural–urban migration is unexpected, confirming that removing one distortion from a market riddled with others can lead to surprising outcomes.