Working Paper: CEPR ID: DP5832
Authors: Anthony Murphy; John Muellbauer; Gavin Cameron
Abstract: Economic conditions exert a strong influence on regional migration. On the one hand, strong labour market conditions, as exemplified by low unemployment rates and high earnings, draw migrants into regions. On the other hand, strong housing market conditions can prevent movement since expensive housing can deter migrants and commuting may often be an alternative. This can be thought of as giving rise to a migration equilibrium, where high house prices choke off migration caused by strong labour market conditions. Expected capital gains in housing and expected earnings growth however, can offset high levels of house prices, effects ignored in previous literature. Migration can also be influenced more directly by the availability of housing relative to population without this being mediated through prices. This paper presents evidence from a 28 year panel on net and gross migration for the regions of Britain that is broadly in accord with these expectations.
Keywords: contiguity; expected capital gains; great britain; house prices; regional migration; regional panel
JEL Codes: C33; J19; R3
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| high earnings (J31) | migration rates (J61) |
| low unemployment rates (J68) | migration rates (J61) |
| high housing prices (R31) | migration rates (J61) |
| expected capital gains in housing (R31) | migration rates (J61) |
| availability of housing (R21) | migration rates (J61) |