IMF Working Papers Volume 2026 Issue 065: The Impact of House Prices on Internal Migration: Case of Spain (2026)

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The Impact of House Prices on Internal Migration: Case of Spain

Author:

Ha Nguyen

Ha Nguyen
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https://orcid.org/0000-0003-4549-035X

Ashwini Arulrajhan

Ashwini Arulrajhan
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Carlo Pizzinelli

Carlo Pizzinelli https://isni.org/isni/0000000404811396 International Monetary Fund

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, and

Ippei Shibata

Ippei Shibata https://isni.org/isni/0000000404811396 International Monetary Fund

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https://orcid.org/0000-0003-3984-4676

Series:: IMF Working Papers

Volume/Issue:: Volume 2026: Issue 065

Language:: English

Publication Date:: 03 Apr 2026

DOI:: https://doi.org/10.5089/9798229042475.001

ISBN:: 9798229042475

ISSN:: 1018-5941

Pages:: 38

Keywords:: Internal migration; housing prices; housing affordability; labor mobility; spatial allocation of labor; regional productivity; Spain; housing cost; housing price; rental price; origin-price elasticity; migration flow; price growth; price response; destination-price elasticity; rental-price elasticity; endogenous price dynamics; price appreciation; rental cost; prices increase; Migration; Housing; Productivity

Legal-disclaimer:: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Series:: IMF Working Papers

Volume/Issue:: Volume 2026: Issue 065

Language:: English

Publication Date:: 03 Apr 2026

DOI:: https://doi.org/10.5089/9798229042475.001

ISBN:: 9798229042475

ISSN:: 1018-5941

Pages:: 38

Keywords:: Internal migration; housing prices; housing affordability; labor mobility; spatial allocation of labor; regional productivity; Spain; housing cost; housing price; rental price; origin-price elasticity; migration flow; price growth; price response; destination-price elasticity; rental-price elasticity; endogenous price dynamics; price appreciation; rental cost; prices increase; Migration; Housing; Productivity

Legal-disclaimer:: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

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This paper studies how house prices shape internal migration across Spain’s provinces and the implications for the spatial allocation of labor. Using a gravity-style framework, we estimate the causal impact of destination and origin house prices on bilateral migration flows between 2007-2023. To address the potential endogeneity of house prices, we instrument provincial house prices with a Bartik-style predictor of external inflows of foreign migrants, allowing this housing demand shock to have larger price effects in provinces with tighter land constraints. The instrumental variable (IV) estimates show that housing costs constitute a significant barrier to internal migrants—a 10 percent increase in destination house prices reduces inflows by about 4.0 percent, while a 10 percent increase in origin house prices increases outflows by about 2.8 percent. These push effects of origin house prices are larger for foreign-born and foreign-born young individuals compared to natives. Rental costs have even stronger effects than home sale prices. A simple back-of-the-envelope calculation suggests that if house prices in high-productivity provinces had not grown faster than the inflation over 2017-23, about 63,000 more working-age individuals would have migrated to these provinces, as opposed to just 1,700 (in net terms) in practice. While the direct implied GDP gain would have been small—about 0.05 percent over this period, such gains would accumulate over time if regional divergence in house prices were left unaddressed. Furthermore, this estimate does not factor in the much larger gains from attracting a large number of recent foreign immigrants—not studied here—to the most-productive regions.

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IMF Working Papers

ISSN:: 1018-5941

Publisher:: International Monetary Fund

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