The Migration Accelerator: Labor Mobility, Housing, and Demand

Greg Howard

The Migration Accelerator: Labor Mobility, Housing, and Demand

Economics

Research output: Contribution to journal › Article › peer-review

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 language	English (US)
Pages (from-to)	147-179
Journal	American Economic Journal: Macroeconomics
Volume	12
Issue number	4
State	Published - Oct 2020

Access to Document

https://www.aeaweb.org/articles?id=10.1257/mac.20180363

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title = "The Migration Accelerator: Labor Mobility, Housing, and 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{\textquoteright} 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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