The European Refugee Crisis and House Prices: Evidence from England and Wales (Joint with William D. Lastrapes)
We study the effect of asylum seeker dispersal on house prices in England and Wales between 2004 and 2015. Using data from the UK Land Registry, we find that dispersal has a negative effect on house prices, and that this negative effect is stronger for smaller and less expensive dwellings. Moreover, this negative effect extends across district boundaries but diminishes with distance. Literature generally attributes this negative effect to an outward mobility response of natives, which results in reduced in housing demand and prices. We find no evidence of such an effect. Instead, we show that dispersal leads to a sharp decrease in the sales of new property, while not affecting the sales of established property. In other words, households do not change their selling plans as a result of asylum seeker inflows, but properties that are being sold sell at a lower price, which in turn discourages the construction of new property. Since dispersal is non-random, but driven by the costs of housing, our analysis relies on instruments that exploit the variation of dispersal but are plausibly exogenous to the evolution of housing prices.
Globalization and Technology Diffusion: The Case of Mobile Phones
This paper examines to what degree trade, FDI and migration promote cellphone usage in developed and developing countries. Since the usage of cellphones requires the installation of costly infrastructure, I analyze the intensive and extensive margin of cellphone diffusion separately. Estimating a two-part model for 30 developed and 89 developing countries between 1985 and 2010, I find similar effects for both country groups: First, FDI accelerates cellphone usage along both the intensive and extensive margin, while the effect of trade is insignificant. Second, I establish a positive link between cellphone usage and migration along the intensive margin. However, this effect is muted by the migration of high skilled workers relative to low skilled workers. Evaluating the overall effect of migration at the mean indicates that the Brain Drain, in fact, more than offsets the positive spillovers from migration. Sensitivity analysis along several dimensions underline the robustness of these results.
The Macroeconomic Consequences of Remittances (Joint with Berrak Bahadir & Santanu Chatterjee)
This paper examines two important channels which influence the dynamic absorption of remittances at the macroeconomic level: (i) the presence of borrowing constraints, and (ii) the distribution of remittances across recipient households. Using an open economy DSGE model with heterogeneous households, we show that remittances accruing to hand-to-mouth households generate a dynamic response that is inherently contractionary for the recipient economy. On the other hand, credit-constrained households with ownership of capital respond in a way that is inherently expansionary. The ability of countercyclical remittances to smooth business cycle shocks also depends critically on their distribution across households. Calibrating the model to Philippines using both aggregate data as well as micro-evidence from the Family Income and Expenditure Survey (FIES), we show that the presence of binding credit constraints and the internal distribution of remittances play an important role in improving the model’s fit to the data. The welfare consequences of the distribution of remittances are also analyzed.
R&R at Journal of International Economics
Williams College of Business
Department of Economics
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Cincinnati, OH 45207