How do cities absorb a large immigration shock? the role of housing

Abstract While the literature has extensively studied the impact of immigration shocks on cities, we know surprisingly little about how cities absorb large immigration waves. This paper helps fill that gap by analyzing the neighborhood-level population dynamics among Spanish-born residents, non-EU15 immigrants, and EU15 immigrants in Spanish cities during the major immigration wave of 2001–2009. Drawing on the monocentric city model, and within a context of path-dependent urban development with outward city growth, we explore how different population groups sort spatially within cities. Higher-income Spanish-born residents tend to settle in more distant suburbs to access larger housing. In contrast, younger and highly educated EU15 immigrants concentrate in central neighborhoods to benefit from urban amenities. Initially, lower-income non-EU15 immigrants settled in central areas with deteriorated housing stock, but over time they increasingly moved to mid-distance neighborhoods with small dwellings built between 1950 and 1970.