U.S. Immigration Levels, Urban Housing Values, and Their Implications for Capital Share

16 Pages Posted: 8 Sep 2016

See all articles by Ryan Murphy

Ryan Murphy

Southern Methodist University (SMU)

Alex Nowrasteh

Cato Institute - Center for Global Liberty and Prosperity

Date Written: August 9, 2016

Abstract

This research note applies previously estimated effects of immigration on housing values to urban counties in the United States. Determining the extent to which increase in urban housing values is attributable to immigration fills a gap in the economics literature. Furthermore, our findings here also help estimate how much of the increase in the net-capital share of income since 1970 as observed by Piketty (2014) is caused by immigration. We find that in most urban counties in the United States, increased levels of immigration have had a modest but non-negligible effect on the level of real estate prices. These effects explain 32.4 percent of the increases in housing prices in the 20 densest counties since 1970, which we interpret in terms of capital share, following Rognlie (2015). While not all housing is urban, the magnitudes of these results suggest that there is some link between increased levels of immigrants and a higher capital share since 1970.

Keywords: Urban Housing, Immigration, Housing Prices

JEL Classification: R31, R32

Suggested Citation

Murphy, Ryan and Nowrasteh, Alex, U.S. Immigration Levels, Urban Housing Values, and Their Implications for Capital Share (August 9, 2016). Cato Working Paper, 2016. Available at SSRN: https://ssrn.com/abstract=2834015 or http://dx.doi.org/10.2139/ssrn.2834015

Ryan Murphy (Contact Author)

Southern Methodist University (SMU) ( email )

6212 Bishop Blvd.
Dallas, TX 75275
United States

Alex Nowrasteh

Cato Institute - Center for Global Liberty and Prosperity ( email )

1000 Massachusetts Avenue, N.W.
Washington, DC 20001-5403
United States

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