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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.

Suggested Citation

  • Zabel, Jeffrey E., 2012. "Migration, housing market, and labor market responses to employment shocks," Journal of Urban Economics, Elsevier, vol. 72(2), pages 267-284.
  • Handle: RePEc:eee:juecon:v:72:y:2012:i:2:p:267-284
    DOI: 10.1016/j.jue.2012.05.006
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    References listed on IDEAS

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    Cited by:

    1. David G. Blanchflower & Andrew J. Oswald, 2013. "Does High Home-Ownership Impair the Labor Market?," NBER Working Papers 19079, National Bureau of Economic Research, Inc.
    2. Andrea Morescalchi, 2016. "The Puzzle Of Job Search And Housing Tenure: A Reconciliation Of Theory And Empirical Evidence," Journal of Regional Science, Wiley Blackwell, vol. 56(2), pages 288-312, March.
    3. Ritashree Chakrabarti & Junfu Zhang, 2015. "Unaffordable housing and local employment growth: Evidence from California municipalities," Urban Studies, Urban Studies Journal Limited, vol. 52(6), pages 1134-1151, May.
    4. D'Albis, Hippolyte & Boubtane, Ekrame & Coulibaly, Dramane, 2017. "International Migration and Regional Housing Markets: Evidence from France," IZA Discussion Papers 10516, Institute for the Study of Labor (IZA).
    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. Greenaway-McGrevy, Ryan & Hood, Kyle K., 2016. "Worker migration or job creation? Persistent shocks and regional recoveries," Journal of Urban Economics, Elsevier, vol. 96(C), pages 1-16.
    7. Joseph Gyourko & Raven Molloy, 2014. "Regulation and Housing Supply," NBER Working Papers 20536, National Bureau of Economic Research, Inc.
    8. Timothy J. Bartik, 2015. "How Effects of Local Labor Demand Shocks Vary with the Initial Local Unemployment Rate," Growth and Change, Wiley Blackwell, vol. 46(4), pages 529-557, December.
    9. Benedetto Manganelli & Francesco Tajani, 2015. "Macroeconomic Variables and Real Estate in Italy and in the usa," SCIENZE REGIONALI, FrancoAngeli Editore, vol. 2015(3), pages 31-48.
    10. Oikarinen, Elias & Peltola, Risto & Valtonen, Eero, 2015. "Regional variation in the elasticity of supply of housing, and its determinants: The case of a small sparsely populated country," Regional Science and Urban Economics, Elsevier, vol. 50(C), pages 18-30.
    11. repec:spr:anresc:v:59:y:2017:i:2:d:10.1007_s00168-017-0832-7 is not listed on IDEAS
    12. Jayaraman, Praveena & Lacombe, Donald J. & 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.
    13. 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.
    14. Xin DONG & Weihua ZHOU, 2016. "Housing Affordability and Permanent Migration Intention of Rural-Urban Migrants," Chinese Journal of Urban and Environmental Studies (CJUES), World Scientific Publishing Co. Pte. Ltd., vol. 4(02), pages 1-12, June.
    15. 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.
    16. Michael Amior & Alan Manning, 2015. "The Persistence of Local Joblessness," CEP Discussion Papers dp1357, Centre for Economic Performance, LSE.
    17. Raven Molloy & Christopher L. Smith & Abigail Wozniak, 2017. "Job Changing and the Decline in Long-Distance Migration in the United States," Demography, Springer;Population Association of America (PAA), vol. 54(2), pages 631-653, April.
    18. repec:tpr:restat:v:99:y:2017:i:2:p:243-257 is not listed on IDEAS
    19. Gyourko, Joseph & Molloy, Raven, 2015. "Regulation and Housing Supply," Handbook of Regional and Urban Economics, Elsevier.

    More about this item

    Keywords

    Housing market; Household migration; VAR models;

    JEL classification:

    • R - Urban, Rural, Regional, Real Estate, and Transportation Economics

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