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The Migration Accelerator: Labor Mobility, Housing, and Demand

2020; American Economic Association; Volume: 12; Issue: 4 Linguagem: Inglês

10.1257/mac.20180363

1945-7707

Greg Howard,

Migration and Labor Dynamics

What is the role of migration in regional evolutions? I document that within-US 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 out-migration 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 nontradable employment. This finding implies the endogenous response of migration amplifies local labor demand shocks by about a third. (JEL J61, J64, R21, R23, R31)