The positive association of rent growth and immigrant inflows is pervasive in time series for all metropolitan areas. The author uses instrumental variables based on a “shift-share” of national levels of immigration into metropolitan areas. Conditioning on other variables, an immigration inflow equal to 1% of the city population is associated with increases in rents and housing values of about 1%. The results suggest an economic impact that is an order of magnitude bigger than that found on labor markets

View the Full Working Paper