Immigration and Housing Booms: Evidence from Spain

Libertad Gonzalez and Francesc Ortega

No 4333, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: 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.

Keywords: construction; house prices; immigration; housing market; Spain (search for similar items in EconPapers)
JEL-codes: F22 J61 R21 R23 R31 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2009-07
New Economics Papers: this item is included in nep-mig and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (25)

Published - published in: Journal of Regional Science, 2013, 53 (1), 37-59

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Related works:
Journal Article: IMMIGRATION AND HOUSING BOOMS: EVIDENCE FROM SPAIN (2013)
Working Paper: Immigration and Housing Booms: Evidence from Spain (2009)
Working Paper: Immigration and housing booms: Evidence from Spain (2009)
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