Immigration and Housing Booms: Evidence from Spain

By Libertad González, Francesc Ortega. Social Science Research Network, 2013

307 citations recorded by the source corpus.

We estimate empirically the effect of immigration on house prices and residential construction activity in Spain over the period 1998-2008. This decade is characterized by both a spectacular housing market boom and a stunning immigration wave. We exploit the variation in immigration across Spanish provinces and construct an instrument based on the historical location patterns of immigrants by country of origin. The evidence points to a sizeable causal effect of immigration on both prices and quantities in the housing market. Between 1998 and 2008, the average Spanish province received an immigrant inflow equal to 17% of the initial working-age population. We estimate that this inflow increased house prices by about 52% and is responsible for 37% of the total construction of new housing units during the period. These figures imply that immigration can account for roughly one third of the housing boom, both in terms of prices and new construction.

Subfields: Accounting, Economics and Econometrics, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/91dfae36b26df2287c5d16478708e203e0e25a16

How researchers see this paper

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In Accounting

1. Sari Pekkala Kerr
2. D. Andrews
3. William R. Kerr
4. Peter Gal

In Economics and Econometrics

1. Sari Pekkala Kerr
2. William R. Kerr
3. D. Andrews
4. Max Nathan
5. Ufuk Akcigit
6. M. D. Ridder
7. Michael A. Clemens
8. Edward L. Glaeser

In Sociology and Political Science

1. William R. Kerr
2. Sari Pekkala Kerr
3. D. Andrews
4. Giovanni Peri

Citations in the corpus

• Economic Impacts of Immigration: A Survey (2011, background): “Gonzalez and Ortega (2009) nd a similar e¤ect in Spain, calculating that immigration could account for a third of Spain s recent housing boom.”
• Immigration and House Prices in the UK (2015, unknown): “For Switzerland Degen and Fischer (2009) nd a positive e¤ect of about 2:7% and for Spain Gonzalez and Ortega (2009) nd a positive e¤ect of 3:2%.”
• The Cycle of Earnings Inequality: Evidence from Spanish Social Security Data (2017, unknown): “Indeed, the fall 9See, e.g., Garćıa-Montalvo (2007), Ayuso and Restoy (2007), González and Ortega (2009), Garriga (2010). between 2007 and 2010 amounts to nearly half of the population initially employed in that sector.”
• Real House Prices in OECD Countries: The Role of Demand Shocks and Structural and Policy Factors (2010, background): “…relationship between immigration and 7 For instance, over the past decade many immigrants to Spain have been employed in the construction sector (see Gonzalez and Ortega, 2009). house prices could be biased downwards if migrants are sensitive to housing costs and move to areas with cheaper housing.”