Spatial Equilibrium? The Difference of Real Income, Housing Markets, and Migration Flows between Russian Cities

Abstract—The objective of the study is to assess, based on a case study of large Russian cities, the proximity of the country’s economic space to the conditions of spatial equilibrium, which is formed as a result of large-scale migration flows between cities and regions of Russia. To solve this problem, we assessed the real incomes of households of various composition with or without their own housing by Russian cities of different size. When calculating real income, nominal wages, the cost of the consumer basket and purchase or rental of real estate were taken into account. Low real incomes of households in cities with populations of up to 500 000 people incentivize migration to the Moscow agglomeration and other major Russian cities. Spatial differentiation of real incomes and, as a result, migration incentives increase sharply for young families with children, as well as for families without personal housing in their cities of origin. Migration to major urban agglomerations provides an increase in real household incomes that exceeds the growth in housing prices. Consequently, high household income level in the largest cities are complemented by higher housing affordability, which amplifies intercity disparities. The Moscow agglomeration is the most attractive to migrants, in particular, Moscow oblast, where two factors are combined: relatively inexpensive housing and the availability of the capital labor market. This encourages migrants to choose the “I live in Moscow oblast, but work in Moscow” lifestyle. At the same time, real household incomes increase sharply, and Moscow oblast is Russia’s main spatial imbalance zone. In addition, large-scale and stable migration flows do not lead to equalization of the real incomes of residents of cities of various size ranks, which indicates not a static, but dynamic spatial balance in the country.