Abstract
We develop a model of wage and rent determination that features spillovers from export-sector shocks to the market for locally produced (nontraded) goods and services, mediated by housing supply elasticities. Our model can explain stylized facts such as “gentrification” in major cities driven by shocks to industries in which those cities specialize.
Highlights
We develop a model of wage and rent determination that features spillovers from export-sector shocks to the market for locally produced goods and services, mediated by housing supply elasticities
Influential literature in labor and urban economics has argued that labor mobility in the US is an important mechanism of adjustment to shocks [1], it has declined over the past decades (Molly, Smith and Wozniak, 2013)
We predict that in cities where the supply elasticity of housing is low, non-traded-sector wages will increase in response to a positive productivity shock, but employment will not increase by much, along the lines of the Balassa-Samuelson effect
Summary
How to cite this paper: Zhong, Y.H. (2017) A Model Study on the Effect of Housing Supply Elasticity on Labor Market. Open Journal of Business and Management, 5, 514-521.
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
