Immigration and the Displacement of Incumbent Households

Abstract

We make use of the universe of immigrants who arrived in Switzerland between 1992 and 2013, granular community level house price and wage data as well as detailed information on the Swiss population to study the effects of immigration on the location choice of incumbent households. Immigration influences a household’s location choice through three distinct channels: house price changes, labor market competition, and households’ sentiment regarding immigration. We find evidence of all three channels. However, we show that the channel to which a household responds most strongly depends on the type of immigration and the characteristics of the household. Our research provides valuable insights into some of the effects of large scale immigration.