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Urban Growth and Immigration

Paper Session

Saturday, Jan. 6, 2018 8:00 AM - 10:00 AM

Pennsylvania Convention Center, 106-A
Hosted By: Society of Government Economists
  • Chair: Steve Payson, U.S. Department of the Interior

Killer Cities and Industrious Cities: New Evidence on 250 Years of Urban Growth

Marina Gindelsky
,
U.S. Bureau of Economic Analysis
Remi Jedwab
,
George Washington University

Abstract

Severely overcrowded tenements, billowing smoke stacks and miasmas resulting from poor sanitation are considered hallmarks of the industrial revolution in the "killer cities'' of the 19th century. In spite of high mortality rates, city growth continued and indeed accelerated throughout this period, reaching 2% annually. Concurrently, urban residents experienced large increases in income and living standards. As economic opportunities grew and childbearing opportunity costs rose, the birth rates of these "industrious'' urban populations fell (Seccombe 1993). The combined effects of industriousness (low fertility rates) and congestion (high mortality rates) were thought to create an "urban penalty'' in cities, which reduced the speed of urban growth. In this paper, we attempt to answer the question: did the Industrial Revolution lead to an "urban penalty''? If not, is there an alternate explanation for attenuated urban growth rates? Numerous prior works have either concentrated on several cities within a short-time period (breadth) or else focused on individual case studies of cities such as Manchester, Liverpool, Chicago etc. (depth). We construct a novel dataset for the top cities from 1700-1950 to study the demographic transition (i.e. the evolution of fertility (birth), mortality (death), and population (city size)) and its effect on urban growth rates. We examine city-level data for 142 cities in 35 countries (3,692 observations) using over 300 sources with a focus on the largest cities at the turn of the century (those with >200k inhabitants in 1900) (Chandler 1987). We find that until the 19th century, death rates were as high or higher than birth rates, leading to negative natural increase. They reached parity with and fell below birth rates by the mid-19th century. Mortality and fertility had started to decline significantly prior to the industrial revolution, with crude death rates decreasing faster than crude birth rates. Thus the high mortality rates and low fertility rates preceded the Industrial Revolution rather than resulting from it, in sharp contrast with previous findings. The urban penalty (relatively higher levels of mortality and lower levels of fertility) initially present at the start of the 19th century caused slow growth but decreased rapidly. The results hold when considering fertility/mortality rates, dropping suspicious observations and outliers, and examining data for the whole urban sector.

Monetary Policy and the Housing Market

Scott A. Wentland
,
U.S. Bureau of Economic Analysis
Jeremy G. Moulton
,
University of North Carolina-Chapel Hill

Abstract

When the Federal Open Market Committee (FOMC) makes monetary policy announcements, liquid markets tend to react immediately to both the direct change (or holding steady) of short term rates and expectations about the future path of monetary policy. In this paper, we examine the extent to which a much less liquid market, residential housing, responds to monetary policy announcements using a novel micro dataset that covers millions of individual property transactions nationally. Rather than using monthly or quarterly aggregated data, we use the underlying microdata obtained from Zillow (“ZTRAX” data set) that includes rich information on individual transactions as well as corresponding home characteristics for each property. Methodologically, transactions-level intra-monthly data better exploits the timing of the announcements for cleaner identification, providing new insights into how monetary policy shocks affect a market that makes up a substantial portion of the economy, where interest rates are thought to play a key role. Empirically, we compare the effect of “surprise” announcements to “expected” announcements on home prices using a regression discontinuity design (RDD), finding that monetary policy surprises generally have a more potent, immediate impact on home prices. Further, we explore the effects of quantitative easing on this market, as well as geographical variation in home price response to monetary policy more generally.

Teardowns, Popups and Bump-outs: What Do Building Permits Say About Housing Supply?

Jenny Schuetz
,
Brookings Institution

Abstract

Cities grow in layers over time. As population and land values increase, older, smaller buildings are replaced with higher density, higher value structures. However, direct costs of redevelopment and political and institutional barriers such as zoning may constrain replacement of older structures, leading to alternate forms of redevelopment. In this paper, I use administrative data on building permits in Washington DC to examine spatial patterns in several forms of building renovations that expand existing structures in particular ways: replacing small buildings with larger ones on the same lot (teardowns), adding stories on top of existing structures (popups), and extending the building footprint by “bumping out” the side or back. Analysis will compare the prevalence of these renovations across neighborhoods with the quantity of new construction and with renovations that do not expand building size. Preliminary results suggest that the type of renovations and expansions do exhibit variations across neighborhoods and over time, not obviously correlated with underlying land values.

The Immigrant Health Paradox in the United States, Europe and Israel

Amelie F. Constant
,
Princeton University

Abstract

Most studies find that immigrants are healthier than natives when they first arrive in the host country. This health advantage, however, erodes and dissipates with time in the host country, as immigrants assimilate negatively to the health level of natives. Often, immigrant health may even become worse than that of natives. This paper investigates the health immigrant paradox using panel survey data about the health of people over 50 in the 21st century and in several traditional immigration countries. Namely the U.S. (the Health and Retirement Survey); sixteen European countries and Israel (the Survey of Health, Age and Retirement in Europe). Results show that immigrants in the U.S. arrive with better health than comparable natives, but their health deteriorates with length of stay and becomes worse than the health of natives. On the other hand, immigrants in Europe, who also arrive with a health advantage lose it within five years since migration and become the same as natives. In contrast, immigrants to Israel have worse health than natives upon arrival, and their health does not improve with additional years in Israel. Several sensitivity tests corroborate these findings.
Discussant(s)
Devin Bunten
,
U.S. Federal Reserve Board
Paul Manchester
,
U.S. Federal Housing Finance Agency
Sharon O'Donnell
,
U.S. Census Bureau
Kelly Bedard
,
University of California-Santa Barbara
JEL Classifications
  • O0 - General
  • R0 - General