The Migration Accelerator: Labor Mobility, Housing, and Aggregate Demand

Research output: Working paper

Abstract

What is the role of migration in regional evolutions? I document that within-U.S. migration causes a reduction in the unemployment rate of the receiving city,over several years. To establish this causal effect, I construct an instrument using outmigration of other places and predict its destination from historical patterns. The decline in unemployment is due to housing. Housing is durable, so increased demand causes a surge of new houses and construction jobs. Additionally, migrants’ housing demand raises prices, increasing borrowing and non-tradable employment. This finding implies the endogenous response of migration amplifies local labor demand shocks by about 20 percent.
Original languageEnglish (US)
StateUnpublished - 2018

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Aggregate demand
Labour mobility
Housing demand
Unemployment rate
Causal effect
Labour demand
Demand shocks
Unemployment
Migrants
Durables
Destination
Borrowing

Cite this

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title = "The Migration Accelerator: Labor Mobility, Housing, and Aggregate Demand",
abstract = "What is the role of migration in regional evolutions? I document that within-U.S. migration causes a reduction in the unemployment rate of the receiving city,over several years. To establish this causal effect, I construct an instrument using outmigration of other places and predict its destination from historical patterns. The decline in unemployment is due to housing. Housing is durable, so increased demand causes a surge of new houses and construction jobs. Additionally, migrants’ housing demand raises prices, increasing borrowing and non-tradable employment. This finding implies the endogenous response of migration amplifies local labor demand shocks by about 20 percent.",
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AB - What is the role of migration in regional evolutions? I document that within-U.S. migration causes a reduction in the unemployment rate of the receiving city,over several years. To establish this causal effect, I construct an instrument using outmigration of other places and predict its destination from historical patterns. The decline in unemployment is due to housing. Housing is durable, so increased demand causes a surge of new houses and construction jobs. Additionally, migrants’ housing demand raises prices, increasing borrowing and non-tradable employment. This finding implies the endogenous response of migration amplifies local labor demand shocks by about 20 percent.

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