Carter

1
Immigration in the First Global Era

• Carter Sutch
• WR Ch 18
• Some slides borrowed from Ransom Sutch
  Giovanni Peri Lety Arroyo-Abad

2
Official Immigrants to the United States
Definition I
Def. II
Definition III
1600000
1200000
800000
400000
0
1820
1840
1860
1880
1900
1920
1940
1960
1980
2000
3
(No Transcript)
4
Comparison to other Countries
5
(No Transcript)
6
(No Transcript)
7
Borjas V Peri Are Immigrants good/ bad?
NYT 7/9/06

• Borjas more job seekers from abroad mean fewer
  opportunities, or lower wages, for native
  workers
• All other economists the consensus of most is
  that, on balance, immigration is good for the
  country. Immigrants provide scarce labor, which
  lowers prices in much the same way global trade
  does. And overall, the newcomers modestly raise
  Americans' per capita income. But the impact is
  unevenly distributed people with means pay less
  for taxi rides and household help while the
  less-affluent command lower wages and probably
  pay more for rent

8
Card Peri

• Card "The demand curve also shifts out as new
  immigrants also have to buy products.
• But, for those workers who directly compete with
  natives (i.e. do the same job/same skills) may be
  negative effects.
• Peris work confirms this earnings for the least
  skilled Americans have not risen as fast as
  without immigration
• But this is more than offset by a positive effect
  on workers who are complimentary to unskilled
  workers skilled workers

9
(No Transcript)
10
The First Global Era
Before 1820, involuntary black migration from
Africa outnumbered white migration 31

• 1920 immigrants were 25 of manufacturing
  workforce 18 in transport 35 in mining

11
Why did people migrate? 1860-1913

• Regression from Hatton Williamson (2005)
• MigRate gross emigration per 1000 pop
• LnWRatio source ctry wage/destination wage
• LnRWage log of source country wage
• LagBirth source ctry birth rate lagged 20 years
• Dum dummy for Belgium, Italy, Spain Portugal

12
Chain Migration the case of Southeast Asia.
160000
Vietnam War
All Immigrants from SE Asia
120000
80000
40000
Indochinese Refugees and Asylees
0
1950
1960
1970
1980
1990
2000
13
Changing Composition

• Assignment 2 You found that 1850-1910, the
  composition of immigrants changed from mainly
  Northern Western European to more Southern
  Eastern European (Italy Spain Russia etc)
• The turning point was 1896 after which the
  majority were new immigrants
• NW Europe SE Europe
• 1821-1890 82 8
• 1891-1920 25 64

14
Proportion of Immigrants from Southern, Eastern
Central Europe
15
Immigrant Quality Evidence

• Are immigrants significantly inferior to natives
  in terms of skill, literacy etc? My own data
  (Census)
• Speaking English
• In 1900 99 of white native-born men aged 14
  could speak English 88 of foreign-born males
  could 73 of immigrants arriving in the last 10
  years could Of those who arrived in the last 10
  years 87 of those who were from NW Europe
  could, 54 of those who were from SE Europe
  could, 69 of others could
• Immigrants who became citizens were more likely
  to speak English

16
Immigrant Quality Evidence

• Literacy
• For the foreign born pop, the proportion who were
  literate declined after 1880, until 1920.
  Opposite trend for native-born (gap widening over
  time)

17
Immigrant Quality Cntd

• Carter Sutch Pull factors dominant immigrants
  will be drawn from the upper end of distribution
• Push factors dominant from lower end
• Mokyr 1983 Looked at Irish immigrants pre-1850
• Were higher skilled than avg Irishman
• Better comparison is between native-born US
  foreign-born C-S conclude there isnt much diff
• Ship manifests Fewer immigrants than natives
  worked in ag more were skilled workers
  unskilled, fewer in dom service professions
• Aggregating, looks like natives more unskilled

18
Immigrant Quality Cntd

• Alternative approach Hill (1975) looked at the
  occupational distribution of jobs immigrants took
  in US
• Pretty similar across native foreign-born
• Foreigners slightly more likely employed in
  unskilled, less in skilled but much more in
  semi-sk
• Did quality fall over time?
• My data suggests maybe it did
• C-S not much change in the categories of
  occupations reported in the ship manifests over
  time

19
Effects of Immigration

• Railroads were built using a lot of contract
  labor
• Immigrants helped settle empty land
• Sukkoo Kim found that immigrants contributed to
  the growth of factories cities
• Increases supply of labor so that firms can take
  advantage of economies of scale
• WR those who profited most were steamship
  companies, manufacturing mining companies

20
Wage Effects

• Lebergott Wages rose at a faster rate after
  1914 this isnt a vigorous test in fact
  immigration was high just after the war before
  restrictions were imposed
• A lot of immigrants in our period returned to
  their native countries, making it difficult to
  quantify their effect Return rate 10 1870 70
  1914
• May mean that they left with downturns in the US
  economy, so not such a bad effect on natives
  they keep their jobs w/o much wage reduction
• Immigrants tended to equalize wages across
  regions as they moved to the high-wage regions

21
Wage Effects

• Depends on how capital adjusts in the long run
• In the US case capital was flowing in (until the
  very end of our period), chasing immigrants this
  would be expected to increase job opportunities
  and put upward pressure on wages for all workers

22
Wage Effects under different counterfactuals
1870-1910

• Hatton-Williamson What Determines Immigrations
  Impact?
• If there was no capital mobility
• The counterfactual of no immigration reveals that
  the US labor-force would have been 27 smaller,
  real wages 34 higher
• For the UK labor-force 16 larger, real wage 12
  lower
• If capital is free to move
• The counterfactual of no immigration reveals that
  the US real wage would have been 9 higher
• UK real wage 7 lower

23
But

• Immigration prevented black migration from the
  South to the North (Brinley Thomas)
• 1870-1910 535000 blacks from the South migrated
  North 1910-1950 3.5m did
• William Collins tested this theory
• Did immigrants sap public resources for
  education, pensions etc? according to Carter
  Sutch, not really, although more research needed

24
Did immigrants also push women out of the
workforce?

• Isaac Hourwich (1912) The desertion of mills
  and factories by native American girls has also
  been explained as their displacement by
  immigrants
• He disagrees, saying that American women left for
  better jobs the increase in women professionals
  was 5 times greater than decline in factory work
  (this was the era when women were moving into
  teaching, we mentioned clerical work in class etc)

25
Immigration Policy

• Timmer-Williamson Policy Index Shows immigration
  becoming more restricted over time

26
Immigration Policy

• 1864 Contract Labor Law made contract labor okay
  (because of labor shortage)
• 1882 Chinese Exclusion Act
• 1897 Idea of a literacy test first introduced
• 1907 Financial test introduced Immig Commission
• 1917 Wilsons veto of the test overruled
• 1921 Emergency Immigration Act
• 1929 National Origins Act
• Work of Claudia Goldin on this owners of
  business wanted to keep immigration labor didnt