Working Paper

Rural-Urban Migration, Structural Transformation, and Housing Markets in China


Abstract: This paper explores the contribution of the structural transformation and urbanization process in the housing market in China. City migration flows combined with an inelastic land supply, due to entry restrictions, has raised house prices. This issue is examined using a multi-sector dynamic general-equilibrium model with migration and housing market. Our quantitative findings suggest that this process accounts for about 80 percent of urban housing prices. This mechanism remains valid in an extension calibrated to the two largest cities where housing booms have been particularly noticeable. Overall, supply factors and productivity account for most of the housing price growth.

Keywords: Migration; structural transformation; housing boom;

JEL Classification: D90; E20; O41; R23; R31;

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Bibliographic Information

Provider: Federal Reserve Bank of St. Louis

Part of Series: Working Papers

Publication Date: 2015-10-16

Number: 2014-28

Pages: 49 pages