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  3. American Economic Journal: Macroeconomics
  4. April 2019
  5. Housing Constraints and Spatial Misallocation

American Economic Journal:
Macroeconomics

ISSN 1945-7707 (Print) | ISSN 1945-7715 (Online)

Housing Constraints and Spatial Misallocation

  • Chang-Tai Hsieh
  • Enrico Moretti
American Economic Journal: Macroeconomics
vol. 11, no. 2, April 2019
(pp. 1–39)
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Abstract

We 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.

Citation

Hsieh, Chang-Tai, and Enrico Moretti. 2019. "Housing Constraints and Spatial Misallocation." American Economic Journal: Macroeconomics, 11 (2): 1–39. DOI: 10.1257/mac.20170388

Additional Materials

JEL Classification

  • 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
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