Housing Demand and Labor Supply: The 1962 Algerian Repatriates to France

By Olivia Briffault. Yale University

A surprising finding in analyses of the effects of immigration is that immigrants generally have a limited effect on local labor market outcomes. One reason that has been hypothesized is that immigration generates an offsetting labor demand, as immigrants seek new homes and local goods.
One important immigration study, Hunt (1992), uses French Census data to examine the impact of the Algerian repatriates to France on the local labor force in the 1960s. Hunt finds that the influx of immigrants had next to no impact on unemployment or wages. In my analysis, I build on Hunt’s labor market study by using a different dataset (INSEE Employment Survey) and two new measures of repatriates, as well as Hunt’s measure, and by measuring an individual’s own immigration status, as well as proportion immigrant by region. I then test the offsetting labor demand hypothesis by analyzing housing conditions and housing market outcomes in France after the arrival of the repatriates.
I find, as Hunt did, that the presence of repatriates had a minimal impact on the local labor market. Residents of regions with more repatriates did not work fewer hours and there were only small effects on unemployment. I also find that repatriates did have a higher probability of being unemployed. Using three measures of the housing market – crowding, new home status, and employment in construction, I find evidence that housing demand was elevated in areas where there were more repatriates. From 1964 to 1970, crowding in areas with more repatriates generally decreased, more new homes were built in these regions, and the number of construction workers increased. The magnitudes of these effects are sensitive to my specification of repatriation.

Read the full paper here.