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Migration, housing market, and labor market responses to employment shocks

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  • Zabel, Jeffrey E.

Abstract

One reason for the United States’ economic success is the willingness of its residents to follow jobs. Households’ decisions to move depend not only on job prospects but also on the relative cost of housing. I investigate how the housing market affects the flow of workers across cities. This occurs through at least two channels: the relative mobility of homeowners versus renters, and the relative cost of housing across markets. I use homeownership rates to measure the former, and use an index that measures house prices across metropolitan statistical areas (MSAs) and the price elasticity of housing supply to capture the latter. To show how variation in the these housing market factors not only affects cross-city migration but also the housing and labor markets, I estimate a VAR model of migration, employment, wages, house prices, and new housing supply using annual data from 277 US MSAs for 1990–2006. The response functions based on labor supply and demand shocks show substantial variation when evaluated at different values of the homeownership rate, the price elasticity of housing supply, and relative housing prices. I also allow for spillover effects in the model that reflect the impact of a labor demand shock in the nearest city.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Urban Economics.

Volume (Year): 72 (2012)
Issue (Month): 2 ()
Pages: 267-284

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Handle: RePEc:eee:juecon:v:72:y:2012:i:2:p:267-284

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Web page: http://www.elsevier.com/locate/inca/622905

Related research

Keywords: Housing market; Household migration; VAR models;

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References

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Citations

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Cited by:
  1. Pan, Huiran & Wang, Chun, 2013. "House prices, bank instability, and economic growth: Evidence from the threshold model," Journal of Banking & Finance, Elsevier, vol. 37(5), pages 1720-1732.
  2. Chakrabarti, Ritashree & Zhang, Junfu, 2014. "Unaffordable Housing and Local Employment Growth: Evidence from California Municipalities," IZA Discussion Papers 8122, Institute for the Study of Labor (IZA).
  3. David G. Blanchflower & Andrew J. Oswald, 2013. "Does High Home-Ownership Impair the Labor Market?," Working Paper Series WP13-3, Peterson Institute for International Economics.
  4. Jayaraman, Praveena & Gebremedhin, Tesfa G., 2013. "A Non-Spatial Analysis of the Role of Residential Real Estate Investment in the Economic Development of the Northeast Region of the United States," 2013 Annual Meeting, February 2-5, 2013, Orlando, Florida 143107, Southern Agricultural Economics Association.
  5. Rowangould, Dana & Eldridge, Melody & Niemeier, Deb, 2013. "Incorporating regional growth into forecasts of greenhouse gas emissions from project-level residential and commercial development," Energy Policy, Elsevier, vol. 62(C), pages 1288-1300.
  6. Jayaraman, Praveena & Lacombe, Donald & Gebremedhin, Tesfa, 2013. "A Spatial Analysis of the Role of Residential Real Estate Investment in the Economic Development of the Northeast Region of the United States," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150953, Agricultural and Applied Economics Association.

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