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 language||English (US)|
|Place of Publication||American Economic Journal: Macroeconomics|
|State||Accepted/In press - 2019|