I'm not sure why the editorializing in the title but here's the actual abstract:
> From early 2021 to early 2024, the U.S. experienced an unprecedented boom in unauthorized immigration, followed by a rapid slowdown beginning in mid-2024. We provide the first systematic empirical assessment of the labor- and housing-market effects of this episode. Using newly available administrative microdata on individual immigrants, we construct measures of net unauthorized immigration at the national and local levels and exploit plausibly exogenous variation across local markets. We find that unauthorized immigrant worker flows (UIWF) increased local employment approximately one-for-one, without significant declines in local wages. These inflows also raised local house prices and rents without expanding housing supply, consistent with a housing demand shock in the face of short-run inelastic supply. Lastly, we find that UIWF reduced labor income per capita, consistent with downward wage composition of the local workforce, and strongly reduced government transfers. These findings should help inform policy debates surrounding how unauthorized immigrant labor supply impacts local labor and housing markets as well as public finances.
Basically what the paper says is at a city-by-city level unauthorized immigrants increase housing prices in to a similar degree to authorized immigrants (about 1% pop increase -> 2% housing price increase), are roughly 100% employed (increase local employment 1:1), and use government services at a lower rate than the base population (about 1% pop increase -> overall 5% decrease in spending). Then a lot of discussion about methodology and related work. I'm a little skeptical of some of the assumptions, they (and apparently the citations) don't appear to account for the fact that in all cases people are more likely to move to places with jobs (economic activity driving labor demand), housing supply is generally pretty inelastic on the scale of a couple years, and so even if nobody moved to the city it's possible wages (and housing prices) would go up anyway.
If only builders could figure out some way to consolidate multiple living units under single roof, with shared building systems. Maybe something in the vertical dimension?
Oh no, but this might mean a hideous three-flat on my otherwise perfect block of identical white-picket-fences! Or God forbid, a duplex
And you know what kind of people live in apartments...
(That being me and most every other person in my neighborhood lol; we're all such animals, us apartment-dwellers, i can see why people would hate having young families, retired couples, and single professionals living on their street! We're a constant stream of boring mediocrity!)
Sarcasm aside: the best neighborhoods are always where there's a mix of housing and easy access to entertainment and chores. The suburbs i grew up in don't make the cut, but every neighborhood I've inhabited since--from college town "city centers" to quiet corners of the north side of Chicago--this is the common factor. Whether i was in a house, an apartment, a duplex, whatever, the good ones are where there's a real mix of housing stock, incomes, family situations, etc and you can get to a grocery store, pharmacy, doctor, or whatever in under 10 minutes, bonus points for being open at night. Visiting family in American exurbs is a major exercise in patience and planning (and driving)
In the USA, lots of housing construction is done by illegal immigrants--it's hard to get people to put on roofs of sheetrock in 37⁰C weather if they have alternatives.
In the latest migration, a fair number were given government support and consumed housing instead of building it.
And yes, the immigration policy of the US is self-destructive. For some reason, the responses seem to ignore the complexity....
I think housing isn't an ordinary durable good the way economists think. If there was a shortage of toasters you couldn't make money by churning toasters like you can if there is a shortage of housing. But you could make money importing toasters. With housing when there is a shortage the effective way to make money is by using access to cheap credit to bid prices higher.
So a housing price spiral is a result of a properly functioning market.
In Australia something similar happened with legal immigration going wild. Obviously there are issues of regulations and NIMBYsm which are far worst than in the US but also because construction unions opposed visas for construction workers, so there is a shortage while all kind of people with unnecessary jobs streamed into the country. The squeeze is from both sides of the political spectrum, asset holding class benefit from it financially and the left benefit from it electoraly by creating poverty and state dependency. No wonder extreme political groups from both ends of the political sides are gaining traction. Those politician betrayed the middle class and working class.
I know it’s good for Blue Team redistricting, but I think we need to seriously reconsider the viability of moving every human on earth to 5 metro areas in the US.
People want to take care of their families, and they go where the jobs are. This has been happening for hundreds of years now, I don't know if it's possible to turn it around.
Higher-level governments elected by the electorate of a larger region are trying hard to make it explicitly illegal for those metro areas to do those things.
However, they seem to simply assert causality. It would seem far more likely that people (illegal or not) move to areas experiencing economic booms that, among other things, is push up home prices.
> This is a detailed study performed by experts. Do you believe they would overlook such obvious explanation?
Yes, they could have possibly overlooked things that appear to be obvious in retrospect. Happens all the time because it may or not have been the focus of the paper, or the time constraints may have not permitted this level of research. This is why we usually have multiple papers, each building on each other over time, on the same data sets/topics.
Said experts do not seem to have included this core analysis in the report.
Since housing starts are more likely in areas seeing rapid housing price appreciation, and construction employs many illegal workers, you could make just as strong of a case that increased housing costs drive unauthorized migration rather than the other way around.
That's why it's so hard, and so important, to disentangle correlation and causation.
If ya build more housing, the value of existing homes might go down. Unfortunately, nobody wants to see their home decrease in value so they don’t want new construction. Or they want it “over there a ways” such that it’s not a negative. Commuting gets worse as there’s no satellite jobs or work from home.
And nobody it seems wants to see higher density housing unless there’s really no choice. So people end up in large housing which is mostly empty after the kid(s) leave. And their retirement depends on selling out for a profit.
>> "Unauthorized Immigration. As noted earlier, we use unauthorized immigrants to refer
to individuals who enter the U.S. without formal admission under immigration law. A large
share of these individuals are encountered by federal authorities at ports of entry, along the
border, or in the interior and are subsequently issued an NTA in immigration court, allowing
them to seek asylum or otherwise challenge removal. [...]"
Probably and it seems a good compromise to me. Under asylum law, "illegal" is technically wrong until the final judgement is rendered. And "undocumented" is IMO an obvious manipulation of language (you would not call a doctor practicing without a medical license "undocumented"). Pending a decision on legality, "unauthorized" seems both neutral and correct.
Cool, lets go after the businesses that hired them because they're the ones who can provide the equivelent remuneration and profitted off that.
Cause you know, that's typically how things work when you're actually concerned about economic impacts and arn't just a rcist dog whistling dog & pony circus show looking to deflect from the other bad to disasterous economic decisions.
Think about it: if this is true, American citizens have been harmed by Businesses that illegally hired workers and cause $X amount of damage. Instead of going after $X + damages of $Y, we've commited to spend $Z amount to go after those workers, even when all evidence points to the illegal hiring both brings in a profit and displaces american workers.
It's such a pointless series of racist shrugs and waste of tax payer funds. Instead of going after the profits of businesses, we go into debt trying to attack workers.
Yes, a demand increase without supply increase causes prices to rise.
In other news, water is wet.
The fact that people are arguing over this is astonishing to me. Politics morphing into the religion of modernity is the worst thing that has happened this century thus far.
I'm not sure why the editorializing in the title but here's the actual abstract:
> From early 2021 to early 2024, the U.S. experienced an unprecedented boom in unauthorized immigration, followed by a rapid slowdown beginning in mid-2024. We provide the first systematic empirical assessment of the labor- and housing-market effects of this episode. Using newly available administrative microdata on individual immigrants, we construct measures of net unauthorized immigration at the national and local levels and exploit plausibly exogenous variation across local markets. We find that unauthorized immigrant worker flows (UIWF) increased local employment approximately one-for-one, without significant declines in local wages. These inflows also raised local house prices and rents without expanding housing supply, consistent with a housing demand shock in the face of short-run inelastic supply. Lastly, we find that UIWF reduced labor income per capita, consistent with downward wage composition of the local workforce, and strongly reduced government transfers. These findings should help inform policy debates surrounding how unauthorized immigrant labor supply impacts local labor and housing markets as well as public finances.
Basically what the paper says is at a city-by-city level unauthorized immigrants increase housing prices in to a similar degree to authorized immigrants (about 1% pop increase -> 2% housing price increase), are roughly 100% employed (increase local employment 1:1), and use government services at a lower rate than the base population (about 1% pop increase -> overall 5% decrease in spending). Then a lot of discussion about methodology and related work. I'm a little skeptical of some of the assumptions, they (and apparently the citations) don't appear to account for the fact that in all cases people are more likely to move to places with jobs (economic activity driving labor demand), housing supply is generally pretty inelastic on the scale of a couple years, and so even if nobody moved to the city it's possible wages (and housing prices) would go up anyway.
In a properly functioning market, new supply would be built when there is new demand. Perhaps they should try to figure out why that isn't happening.
Housing suffers from being based on a naturally scarce resource land. Markets drive prices higher but new land cannot be created
If only builders could figure out some way to consolidate multiple living units under single roof, with shared building systems. Maybe something in the vertical dimension?
Oh no, but this might mean a hideous three-flat on my otherwise perfect block of identical white-picket-fences! Or God forbid, a duplex
And you know what kind of people live in apartments...
(That being me and most every other person in my neighborhood lol; we're all such animals, us apartment-dwellers, i can see why people would hate having young families, retired couples, and single professionals living on their street! We're a constant stream of boring mediocrity!)
Sarcasm aside: the best neighborhoods are always where there's a mix of housing and easy access to entertainment and chores. The suburbs i grew up in don't make the cut, but every neighborhood I've inhabited since--from college town "city centers" to quiet corners of the north side of Chicago--this is the common factor. Whether i was in a house, an apartment, a duplex, whatever, the good ones are where there's a real mix of housing stock, incomes, family situations, etc and you can get to a grocery store, pharmacy, doctor, or whatever in under 10 minutes, bonus points for being open at night. Visiting family in American exurbs is a major exercise in patience and planning (and driving)
That would violate many local zoning laws. NIMBY!
[dead]
Pretty much the whole developed world is suffering excessive housing prices.
Whoever has the money to develop housing is in a position to exploit the scarcity as well.
In the USA, lots of housing construction is done by illegal immigrants--it's hard to get people to put on roofs of sheetrock in 37⁰C weather if they have alternatives.
In the latest migration, a fair number were given government support and consumed housing instead of building it.
And yes, the immigration policy of the US is self-destructive. For some reason, the responses seem to ignore the complexity....
I think housing isn't an ordinary durable good the way economists think. If there was a shortage of toasters you couldn't make money by churning toasters like you can if there is a shortage of housing. But you could make money importing toasters. With housing when there is a shortage the effective way to make money is by using access to cheap credit to bid prices higher.
So a housing price spiral is a result of a properly functioning market.
as in most matters of public controversy, both things are true.
In Australia something similar happened with legal immigration going wild. Obviously there are issues of regulations and NIMBYsm which are far worst than in the US but also because construction unions opposed visas for construction workers, so there is a shortage while all kind of people with unnecessary jobs streamed into the country. The squeeze is from both sides of the political spectrum, asset holding class benefit from it financially and the left benefit from it electoraly by creating poverty and state dependency. No wonder extreme political groups from both ends of the political sides are gaining traction. Those politician betrayed the middle class and working class.
I know it’s good for Blue Team redistricting, but I think we need to seriously reconsider the viability of moving every human on earth to 5 metro areas in the US.
People want to take care of their families, and they go where the jobs are. This has been happening for hundreds of years now, I don't know if it's possible to turn it around.
Well it's those large metro areas that roll out the red carpet for them (assistance programs and sanctuary status), so I see no problem with it.
Higher-level governments elected by the electorate of a larger region are trying hard to make it explicitly illegal for those metro areas to do those things.
[dead]
The research is impressive in its granularity.
However, they seem to simply assert causality. It would seem far more likely that people (illegal or not) move to areas experiencing economic booms that, among other things, is push up home prices.
This is a detailed study performed by experts. Do you believe they would overlook such obvious explanation?
I'm sorry, but your argument sounds like the typical HN oversimplification that leads people to say they could build Dropbox in a weekend.
> This is a detailed study performed by experts. Do you believe they would overlook such obvious explanation?
Yes, they could have possibly overlooked things that appear to be obvious in retrospect. Happens all the time because it may or not have been the focus of the paper, or the time constraints may have not permitted this level of research. This is why we usually have multiple papers, each building on each other over time, on the same data sets/topics.
> Do you believe they would overlook such obvious explanation?
Do you think they have a motive to generate a specific response? It's an appropriate question to ask about any source.
Said experts do not seem to have included this core analysis in the report.
Since housing starts are more likely in areas seeing rapid housing price appreciation, and construction employs many illegal workers, you could make just as strong of a case that increased housing costs drive unauthorized migration rather than the other way around.
That's why it's so hard, and so important, to disentangle correlation and causation.
If ya build more housing, the value of existing homes might go down. Unfortunately, nobody wants to see their home decrease in value so they don’t want new construction. Or they want it “over there a ways” such that it’s not a negative. Commuting gets worse as there’s no satellite jobs or work from home.
And nobody it seems wants to see higher density housing unless there’s really no choice. So people end up in large housing which is mostly empty after the kid(s) leave. And their retirement depends on selling out for a profit.
unauthorized? Are they trying to find a middle ground word between "illegal" and "undocumented"?
>> "Unauthorized Immigration. As noted earlier, we use unauthorized immigrants to refer to individuals who enter the U.S. without formal admission under immigration law. A large share of these individuals are encountered by federal authorities at ports of entry, along the border, or in the interior and are subsequently issued an NTA in immigration court, allowing them to seek asylum or otherwise challenge removal. [...]"
page 11
Probably and it seems a good compromise to me. Under asylum law, "illegal" is technically wrong until the final judgement is rendered. And "undocumented" is IMO an obvious manipulation of language (you would not call a doctor practicing without a medical license "undocumented"). Pending a decision on legality, "unauthorized" seems both neutral and correct.
Seems like a fairly neutral term to me.
[flagged]
Cool, lets go after the businesses that hired them because they're the ones who can provide the equivelent remuneration and profitted off that.
Cause you know, that's typically how things work when you're actually concerned about economic impacts and arn't just a rcist dog whistling dog & pony circus show looking to deflect from the other bad to disasterous economic decisions.
Think about it: if this is true, American citizens have been harmed by Businesses that illegally hired workers and cause $X amount of damage. Instead of going after $X + damages of $Y, we've commited to spend $Z amount to go after those workers, even when all evidence points to the illegal hiring both brings in a profit and displaces american workers.
It's such a pointless series of racist shrugs and waste of tax payer funds. Instead of going after the profits of businesses, we go into debt trying to attack workers.
Immigrants aren’t the ones restricting zoned capacity. That would be local government.
Yes, a demand increase without supply increase causes prices to rise.
In other news, water is wet.
The fact that people are arguing over this is astonishing to me. Politics morphing into the religion of modernity is the worst thing that has happened this century thus far.