Housing Constraints and Spatial Misallocation
AbstractWe quantify the amount of spatial misallocation of labor across US cities and its aggregate costs. Misallocation arises because high productivity cities like New York and the San Francisco Bay Area have adopted stringent restrictions to new housing supply, effectively limiting the number of workers who have access to such high productivity. Using a spatial equilibrium model and data from 220 metropolitan areas we find that these constraints lowered aggregate US growth by 36 percent from 1964 to 2009.
CitationHsieh, Chang-Tai, and Enrico Moretti. 2019. "Housing Constraints and Spatial Misallocation." American Economic Journal: Macroeconomics, 11 (2): 1-39. DOI: 10.1257/mac.20170388
- E23 Macroeconomics: Production
- J24 Human Capital; Skills; Occupational Choice; Labor Productivity
- J31 Wage Level and Structure; Wage Differentials
- R23 Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics
- R31 Housing Supply and Markets