Most discussions on the effect of in-migration on the local labor market have focused on causation flowing from migration to wages. The “textbook model” assumes a labor supply increase without a movement in the demand for labor, and holds that in-migration will cause the labor market to clear at a lower wage level. This conventional model makes the unlikely assumption that migration does not also expand local labor demand. We identify four channels through which migration will increase the demand for local labor: residential and non-residential construction and private and public demand for non-traded goods and services. In the moderate run, construction will move the labor demand curve more than any other factor. The elasticity of response of construction to changes in population differs across metropolitan areas. In the long run, construction will be completed; at all runs, both the private sector and public sector will expand purchases of non-traded goods and services to meet the needs of an expanded population. We then explore the factors that affect the magnitude of the response of labor demand through each of these channels, with particular emphasis on building supply elasticity as a key variable that characterizes different responses across different regions. We produce empirical estimates of the magnitude of induced labor demand through each of these channels, with the goal of measuring the effect of in-migration on labor demand. In some regions, preliminary estimates indicate that in the moderate run multipliers will produce an increase in labor demand greater than the increase in labor supply – a potentially destabilizing force for boom and bust.

The abolition of capital and exchange controls in the UK in 1979 and the series of reforms and deregulations at the London Stock Exchange in October 1986, collectively termed the ‘Big Bang’, played vital roles in the revitalization of London as an international financial center. Beginning in the 1970’s with the revitalization of international finance, there were several key regulatory changes that impacted the relative competitive positioning of major stock exchanges. The first was the abolition of the historical cartel agreements for fixed trading commissions in the US in 1975. With the abolition of capital and exchange controls in the UK, competition from New York forced the unfixing of trading commissions, the allowance of dual capacity trading operations in financial institutions, the opening of the London Stock Exchange to foreign investors, and the implementation of new trading technologies. In this study, I will evaluate the impact that these deregulations had on the London Stock Exchange (LSE), the New York Stock Exchange (NYSE), and other major equity markets in terms of changes in trading volume. Using historic trading records of major cross-listed companies, I will conduct an event study to infer whether major shifts in trading volume between exchanges occurred as a result of these deregulations. I will also estimate the price elasticity of demand among the stock exchanges using data on commissions in different markets. I anticipate that a shift away from the LSE after 1979 to the lesser-regulated NYSE was due largely to the lifting of exchange controls in the UK. Similarly, I predict that the large-scale deregulations that came with the Big Bang will show to have caused the LSE to reclaim much of this lost trading volume and to grab order flow from neighboring European exchanges.