IDEAS home Printed from https://ideas.repec.org/p/zbw/vfsc15/113172.html
   My bibliography  Save this paper

On the Interaction Between Migration, Capital Formation, and the Price for Housing Services

Author

Listed:
  • Grossmann, Volker
  • Schäfer, Andreas
  • Steger, Thomas M.

Abstract

We theoretically investigate the effects of interregional labor market integration on the dynamic interaction between migration flows, capital formation, and the price for housing services. The nature of this interaction depends on initial conditions at the time of labor market integration. In an initially capital-poor economy, there may be a reversal of migration flows during the transition to the steady state, like observed in Eastern Europe after 1990. In a high-productivity country which attracts immigrants, the price for housing services and the rental rate of land increase along with (residential) capital investments. Welfare effects are heterogeneous: whereas landless individuals lose from immigration because of increases in the price for housing services, landowners may win because of an increasing rental rate of land.

Suggested Citation

  • Grossmann, Volker & Schäfer, Andreas & Steger, Thomas M., 2015. "On the Interaction Between Migration, Capital Formation, and the Price for Housing Services," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113172, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc15:113172
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/113172/1/VfS_2015_pid_204.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Andreas Schäfer & Thomas Steger, 2014. "Journey into the Unknown? Economic Consequences of Factor Market Integration under Increasing Returns to Scale," Review of International Economics, Wiley Blackwell, vol. 22(4), pages 783-807, September.
    2. Libertad Gonzalez & Francesc Ortega, 2013. "Immigration And Housing Booms: Evidence From Spain," Journal of Regional Science, Wiley Blackwell, vol. 53(1), pages 37-59, February.
    3. Saiz, Albert, 2007. "Immigration and housing rents in American cities," Journal of Urban Economics, Elsevier, vol. 61(2), pages 345-371, March.
    4. Rachel M. Friedberg, 2001. "The Impact of Mass Migration on the Israeli Labor Market," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(4), pages 1373-1408.
    5. Christian Nygaard, 2011. "International Migration, Housing Demand and Access to Homeownership in the UK," Urban Studies, Urban Studies Journal Limited, vol. 48(11), pages 2211-2229, August.
    6. George J. Borjas, 2021. "The Labor Demand Curve Is Downward Sloping: Reexamining The Impact Of Immigration On The Labor Market," World Scientific Book Chapters, in: Foundational Essays in Immigration Economics, chapter 9, pages 235-274, World Scientific Publishing Co. Pte. Ltd..
    7. Reichlin, Pietro & Rustichini, Aldo, 1998. "Diverging patterns with endogenous labor migration," Journal of Economic Dynamics and Control, Elsevier, vol. 22(5), pages 703-728, May.
    8. Rappaport, Jordan, 2005. "How does labor mobility affect income convergence?," Journal of Economic Dynamics and Control, Elsevier, vol. 29(3), pages 567-581, March.
    9. Solimano, Andrés & Watts, Nathalie, 2005. "International migration, capital flows and the global economy: a long run view," Macroeconomía del Desarrollo 5400, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    10. Michael C. Burda, 2006. "Factor Reallocation in Eastern Germany after Reunification," American Economic Review, American Economic Association, vol. 96(2), pages 368-374, May.
    11. repec:esx:essedp:729 is not listed on IDEAS
    12. Breinlich, Holger & Ottaviano, Gianmarco I.P. & Temple, Jonathan R.W., 2014. "Regional Growth and Regional Decline," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 4, pages 683-779, Elsevier.
    13. Jeanty, P. Wilner & Partridge, Mark & Irwin, Elena, 2010. "Estimation of a spatial simultaneous equation model of population migration and housing price dynamics," Regional Science and Urban Economics, Elsevier, vol. 40(5), pages 343-352, September.
    14. Faini, Riccardo, 1996. "Increasing returns, migrations and convergence," Journal of Development Economics, Elsevier, vol. 49(1), pages 121-136, April.
    15. Grogger, Jeffrey & Hanson, Gordon H., 2011. "Income maximization and the selection and sorting of international migrants," Journal of Development Economics, Elsevier, vol. 95(1), pages 42-57, May.
    16. Hayashi, Fumio, 1982. "Tobin's Marginal q and Average q: A Neoclassical Interpretation," Econometrica, Econometric Society, vol. 50(1), pages 213-224, January.
    17. Albert Saiz, 2003. "Room in the Kitchen for the Melting Pot: Immigration and Rental Prices," The Review of Economics and Statistics, MIT Press, vol. 85(3), pages 502-521, August.
    18. Abel, Andrew B., 1982. "Dynamic effects of permanent and temporary tax policies in a q model of investment," Journal of Monetary Economics, Elsevier, vol. 9(3), pages 353-373.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Grossmann, Volker & Schäfer, Andreas & Steger, Thomas & Fuchs, Benjamin, 2017. "Reversal of migration flows: A fresh look at the German reunification," Journal of International Economics, Elsevier, vol. 109(C), pages 1-15.
    2. Grossmann, Volker & Schäfer, Andreas & Steger, Thomas M., 2013. "Migration, Capital Formation, and House Prices," IZA Discussion Papers 7225, Institute of Labor Economics (IZA).
    3. Felbermayr, Gabriel & Grossmann, Volker & Kohler, Wilhelm, 2012. "Migration, International Trade and Capital Formation: Cause or Effect?," IZA Discussion Papers 6975, Institute of Labor Economics (IZA).
    4. Böhm, Sebastian, 2015. "Regional economic integration and factor mobility in unified Germany," FSES Working Papers 463, Faculty of Economics and Social Sciences, University of Freiburg/Fribourg Switzerland.
    5. Jens Ruhose, 2015. "Microeconometric Analyses on Economic Consequences of Selective Migration," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 61.
    6. Joan Monras, 2020. "Immigration and Wage Dynamics: Evidence from the Mexican Peso Crisis," Journal of Political Economy, University of Chicago Press, vol. 128(8), pages 3017-3089.
    7. Tingzhu Li & Ran Liu & Wei Qi, 2019. "Regional Heterogeneity of Migrant Rent Affordability Stress in Urban China: A Comparison between Skilled and Unskilled Migrants at Prefecture Level and Above," Sustainability, MDPI, vol. 11(21), pages 1-26, October.
    8. Sanchis-Guarner, Rosa, 2023. "Decomposing the impact of immigration on house prices," Regional Science and Urban Economics, Elsevier, vol. 100(C).
    9. Jean-François Maystadt & Valerie Mueller & Ashwini Sebastian, 2016. "Environmental Migration and Labor Markets in Nepal," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 3(2), pages 417-452.
    10. Simonetta Longhi & Peter Nijkamp & Jacques Poot, 2009. "Regional Economic Impacts of Immigration: A Review," Tinbergen Institute Discussion Papers 09-047/3, Tinbergen Institute, revised 23 Jul 2009.
    11. ., 2012. "Migration impact assessment: a state of the art," Chapters, in: Peter Nijkamp & Jacques Poot & Mediha Sahin (ed.), Migration Impact Assessment, chapter 1, pages 3-62, Edward Elgar Publishing.
    12. Bodvarsson, Örn B. & Van den Berg, Hendrik F. & Lewer, Joshua J., 2008. "Measuring immigration's effects on labor demand: A reexamination of the Mariel Boatlift," Labour Economics, Elsevier, vol. 15(4), pages 560-574, August.
    13. Sara de la Rica & Albretch Glitz & Francesc Ortega, 2013. "Immigration in Europe: Trends, Policies and Empirical Evidence," Working Papers 2013-16, FEDEA.
    14. Mussa, Abeba & Nwaogu, Uwaoma G. & Pozo, Susan, 2017. "Immigration and housing: A spatial econometric analysis," Journal of Housing Economics, Elsevier, vol. 35(C), pages 13-25.
    15. Marcus H. Böhme & Sarah Kups, 2017. "The economic effects of labour immigration in developing countries: A literature review," OECD Development Centre Working Papers 335, OECD Publishing.
    16. Labanca, Claudio, 2014. "The effects of a temporary migration shock. The case of the Arab Spring migration toward Italy," University of California at San Diego, Economics Working Paper Series qt8m49f3qb, Department of Economics, UC San Diego.
    17. Sanchis-Guarner, Rosa, 2014. "First-come first-served: identifying the demand effect of immigration inflows on house prices," LSE Research Online Documents on Economics 58341, London School of Economics and Political Science, LSE Library.
    18. repec:hal:wpspec:info:hdl:2441/31alui3q4c913als7a73udp5dv is not listed on IDEAS
    19. repec:hal:spmain:info:hdl:2441/31alui3q4c913als7a73udp5dv is not listed on IDEAS
    20. Sari Pekkala Kerr & William R. Kerr, 2011. "Economic Impacts of Immigration: A Survey," Finnish Economic Papers, Finnish Economic Association, vol. 24(1), pages 1-32, Spring.
    21. Kathrin Degen & Andreas M. Fischer, 2017. "Immigration and Swiss House Prices," Swiss Journal of Economics and Statistics, Springer;Swiss Society of Economics and Statistics, vol. 153(1), pages 15-36, January.
    22. Daniel Forero-Vargas & Victor Iturra, 2022. "Assessing the impact of recent Venezuelan immigration on housing rents in Colombia," Spatial Economic Analysis, Taylor & Francis Journals, vol. 17(4), pages 520-537, October.

    More about this item

    JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • F20 - International Economics - - International Factor Movements and International Business - - - General
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:vfsc15:113172. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/vfsocea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.