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Climate Change, Migration, and Regional Economic Impacts in the United States

Author

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  • Qin Fan
  • Karen Fisher-Vanden
  • H. Allen Klaiber

Abstract

Recent studies predict that climate change will lead to a redistribution of population across the United States, as people choose to locate in regions less susceptible to extreme climate. However, these studies ignore the fact that migration will be dampened by changes in wage rates and housing prices as a result of migration. In this study, we apply a novel approach of linking a residential sorting model to an interregional computable general equilibrium model of the United States to capture wage and housing price feedbacks to assess the economic impacts of climate-change-induced migration. We find that endogenizing wages significantly dampens migration patterns. However, there are significant positive impacts on gross regional product and consumption in the Northeast, West, and California at the expense of the South and Midwest. In addition, wage effects are found to dominate housing price and climate effects, which results in larger welfare changes.

Suggested Citation

  • Qin Fan & Karen Fisher-Vanden & H. Allen Klaiber, 2018. "Climate Change, Migration, and Regional Economic Impacts in the United States," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 5(3), pages 643-671.
    • Handle: RePEc:ucp:jaerec:doi:10.1086/697168
    DOI: 10.1086/697168
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    Citations

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    Cited by:

    1. Mark Colas & John M. Morehouse, 2022. "The environmental cost of land‐use restrictions," Quantitative Economics, Econometric Society, vol. 13(1), pages 179-223, January.
    2. Byungdoo Kim & David L. Kay & Jonathon P. Schuldt, 2021. "Will I have to move because of climate change? Perceived likelihood of weather- or climate-related relocation among the US public," Climatic Change, Springer, vol. 165(1), pages 1-8, March.
    3. Meri Davlasheridze & Qin Fan & Wesley Highfield & Jiaochen Liang, 2021. "Economic impacts of storm surge events: examining state and national ripple effects," Climatic Change, Springer, vol. 166(1), pages 1-20, May.
    4. Anqi Xu, 2023. "Spatial Patterns and Determinants of Inter-county Migration in California: A Multilevel Gravity Model Approach," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 42(3), pages 1-33, June.
    5. Yongyang Cai, 2020. "The Role of Uncertainty in Controlling Climate Change," Papers 2003.01615, arXiv.org, revised Oct 2020.
    6. Bakkensen, Laura A. & Ma, Lala, 2020. "Sorting over flood risk and implications for policy reform," Journal of Environmental Economics and Management, Elsevier, vol. 104(C).
    7. Qin Fan & Meri Davlasheridze, 2019. "Economic Impacts Of Migration And Brain Drain After Major Catastrophe: The Case Of Hurricane Katrina," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 10(01), pages 1-21, February.
    8. Hua Zhong & Michael H. Taylor & Kimberly S. Rollins & Dale T. Manning & Christopher G. Goemans, 2019. "Who pays for water scarcity? Evaluating the welfare implications of water infrastructure investments for cities," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 63(3), pages 559-600, December.
    9. Sheldon, Tamara L. & Zhan, Crystal, 2022. "The impact of hurricanes and floods on domestic migration," Journal of Environmental Economics and Management, Elsevier, vol. 115(C).
    10. Lu, Jiajun, 2020. "Household residential location choice in retirement: The role of climate amenities," Regional Science and Urban Economics, Elsevier, vol. 84(C).
    11. Dan S. Rickman & Hongbo Wang, 2020. "Whither the American west economy? Natural amenities, mineral resources and nonmetropolitan county growth," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 65(3), pages 673-701, December.
    12. Johannes Ziesmer & Ding Jin & Sneha D Thube & Christian Henning, 2023. "A Dynamic Baseline Calibration Procedure for CGE models," Computational Economics, Springer;Society for Computational Economics, vol. 61(4), pages 1331-1368, April.

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