The Economics of Immigration 2nd Edition by Cynthia Bansak

Exercise 3

Assume there is an influx of low-skilled workers in the Chicago metropolitan area. Model the effects on the housing market for Chicago, considering both demand and supply factors. How would the results change if it were an influx of high-skilled workers? Model those effects and compare your results. Explain how diversity as considered by Ottaviano and Peri (2006) can affect these answers.