Home About Latest Browse RSS Advanced Search

Federal Reserve Bank of Chicago
Working Paper Series
Gross Migration, Housing and Urban Population Dynamics
Morris A. Davis
Jonas D. M. Fisher
Marcelo Veracierto
Abstract

Cities experience significant, near random walk productivity shocks, yet population is slow to adjust. In practise local population changes are dominated by variation in net migration, and we argue that understanding gross migration is essential to quantify how net migration may slow population adjustments. Housing is also a natural candidate for slowing population adjustments because it is difficult to move, costly to build quickly, and a large durable stock makes a city attractive to potential migrants. We quantify the influence of migration and housing on urban population dynamics using a dynamic general equilibrium model of cities which incorporates a new theory of gross migration motivated by patterns we uncover in a panel of US cities. After assigning values to the model's parameters with an exactly identified procedure, we demonstrate that its implied dynamic responses to productivity shocks of population, gross migration, employment, wages, home construction and house prices strongly resemble those we estimate with our panel data. The empirically validated model implies that costs of attracting workers to cities drive slow population adjustments. Housing plays a very limited role.


Download Full text
Cite this item
Morris A. Davis & Jonas D. M. Fisher & Marcelo Veracierto, Gross Migration, Housing and Urban Population Dynamics, Federal Reserve Bank of Chicago, Working Paper Series WP-2013-19, 02 Dec 2013.
More from this series
JEL Classification:
Subject headings:
Keywords: Housing; house prices; labor reallocation
For corrections, contact Bernie Flores ()
Fed-in-Print is the central catalog of publications within the Federal Reserve System. It is managed and hosted by the Economic Research Division, Federal Reserve Bank of St. Louis.

Privacy Legal