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Working Paper
The Postpandemic U.S. Immigration Surge: New Facts and Inflationary Implications
The U.S. experienced an extraordinary postpandemic surge in unauthorized immigration. This paper combines administrative data on border encounters and immigration court records with household survey data to document two new facts about these immigrants: They tend to be hand-to-mouth consumers and low-skilled workers that complement the existing workforce. We build these features into a model with capital, household heterogeneity and population growth to study the inflationary effects of this episode. Contrary to the popular view, we find little effect on inflation, as the increase in supply ...
Working Paper
Snow Belt to Sun Belt Migration: End of an Era?
Internal migration has been cited as a key channel by which societies will adapt to climate change. We show in this paper that this process has already been happening in the United States. Over the course of the past 50 years, the tendency of Americans to move from the coldest places (“snow belt”), which have become warmer, to the hottest places (“sun belt”), which have become hotter, has steadily declined. In the latest full decade, 2010-2020, both county population growth and county net migration rates were essentially uncorrelated with the historical means of either extreme heat ...
U.S. Population Growth Slowed Further in 2020
This year will likely be the slowest annual population increase in U.S. history outside of wartime.
Working Paper
From Population Growth to TFP Growth
A slowdown in population growth causes a decline in business dynamism by increasing the share of old businesses. But how does it affect productivity growth? We answer this question by extending a standard business dynamics model to include endogenous productivity growth. Theoretically, the growth rate of the size of surviving old businesses is a “sufficient statistic" for determining the direction and magnitude of the impact of population growth on productivity growth. Quantitatively, this effect is significant across balanced growth paths for the United States and Japan. TFP growth in the ...
Journal Article
Housing Affordability and Housing Demand
Understanding housing demand dynamics through two indicators, income growth and population growth, provides important insights into housing affordability. Research shows that average U.S. income growth is strongly related to rising house prices but is essentially unrelated to changes in the supply of housing units across metropolitan areas. Instead, greater population growth translates into greater housing supply growth, with housing supply generally outpacing population, even in expensive markets. Thus, differences in affordability across areas may reflect differences in the growth and type ...
Working Paper
The Postpandemic U.S. Immigration Surge: New Facts and Inflationary Implications
The U.S. experienced an extraordinary surge in immigration from 2021 to 2024, which triggered widespread discussions about its macroeconomic impact, particularly on inflation. To determine the impact of the immigration surge, we first document the salient features of these new immigrants: they are primarily low-skilled relative to the existing workforce and more likely to be hand-to-mouth consumers. We then incorporate these features into a heterogeneous agent model with capital-skill complementarity. We find that the supply- and demand-side effects of the immigration surge roughly cancel ...
Journal Article
From Brain Drain to Brain Gain, Oklahoma’s Population on the Rise
This edition of Oklahoma Economist examines multiple sources of state migration data to quantify the drivers of the state’s population growth. It finds the recent surge of new residents was driven primarily by historic levels of domestic migration from states in the western half of the U.S., as well as a reversal of the “brain drain” that plagued the state for much of the 2010s.
Working Paper
From Population Growth to TFP Growth
A slowdown in population growth reduces business dynamism by increasing the share of older firms. We explore how this affects productivity growth using a business dynamics model with endogenous productivity. The growth rate of older firms is a key factor in determining the impact of population growth on productivity. Quantitatively, this effect is substantial for both the U.S. and Japan. In the U.S., slowing population growth reduces TFP growth by 0.3 percentage points from 1970 to 2060, with an even larger effect in Japan. However, TFP growth reacts slowly due to short-run counterbalancing ...
Working Paper
From Population Growth to TFP Growth
A slowdown in population growth causes a decline in business dynamism by increasing the share of old businesses. But how does it affect productivity growth? We answer this question by extending a standard firm dynamics model to include endogenous productivity growth. Theoretically, the growth rate of the size of surviving old businesses is a “sufficient statistic" for determining the direction and magnitude of the impact of population growth on TFP growth. Quantitatively, this effect is significant across balanced growth paths for the United States and Japan. TFP growth in the United States ...
Briefing
Secular Trends in Macroeconomics and Firm Dynamics: A Conference Recap
How does declining population growth affect firm dynamics? Is income growth volatility decreasing in the U.S.? How do changes in housing prices affect young businesses? Have investments in artificial intelligence improved productivity? These were among the questions addressed by economists during a recent Richmond Fed research conference.