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  3. American Economic Journal: Macroeconomics
  4. October 2020
  5. The Migration Accelerator: Labor Mobility, Housing, and Demand

The Migration Accelerator: Labor Mobility, Housing, and Demand

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Abstract

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.

Citation

Howard, Greg. 2020. "The Migration Accelerator: Labor Mobility, Housing, and Demand." American Economic Journal: Macroeconomics, 12 (4): 147-79. DOI: 10.1257/mac.20180363

Additional Materials

JEL Classification

  • J61 Geographic Labor Mobility; Immigrant Workers
  • J64 Unemployment: Models, Duration, Incidence, and Job Search
  • R21 Urban, Rural, Regional, Real Estate, and Transportation Economics: Housing Demand
  • R23 Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics
  • R31 Housing Supply and Markets
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