Presenter: Anil Kumar, Aarhus University

Title: Long-term Impacts of Immigration on House Prices

Abstract: To estimate the causal effect of immigration on house prices in the long-run, we address the key problem of immigrant sorting by exploiting exogenous variation from push-factor migration and a unique institutional setting that allocates refugee immigrants to municipalities on a quasi-random basis. Economic theory predicts that immigrant influx will increase demand for residential space, increasing rents and house prices and residential construction at the aggregate level, but have ambiguous effects at the neighborhood level in case of native flight. We find a large positive impact on municipal house prices and little evidence of native flight. At the neighborhood level, we find also find a positive impact on house prices, albeit more modest, as well as evidence of native flight. We also provide evidence of inelastic supply in the larger municipalities where immigrants tend to settle. Our findings can help policy makers in the design of economic policies that re-distribute part of the gains from immigration to groups that bear the burden from immigration and thereby decrease political opposition to immigration

Organizers: Stefan Hirth and Anders Merrild Posselt