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Sunday, July 22, 2007

"The Effect of Internal Migration on Local Labor Markets: American Cities During the Great Depression"

I haven't had a chance to read past the introduction and conclusion yet, but this paper looks worth taking a closer look. Here's the conclusion:

The Effect of Internal Migration on Local Labor Markets: American Cities During the Great Depression, by Leah Platt Boustan, Price V. Fishback, and Shawn E. Kantor NBER WP 13276, July 2007 [open link]: ...V. Conclusion Throughout American history there has been extensive debate about the impact of immigrants on the economic status of native-born workers. The conversation has become particularly heated recently as the nation considers immigration reform. Economists working with modern data have not reached a consensus about the impact of immigrants on wages and work opportunities.

During the Depression, immigration from abroad was dampened by the combination of a massive economic downturn and strict immigration quotas. Even so, residents in areas where the Depression was less severe protested influxes of migrants from other parts of the country. The most famous example was the outcry in California against the Dust Bowl migrants, but the same debates occurred throughout the country. The new arrivals were accused of taking jobs, lowering wages, and crowding relief rolls. Using aggregate data on internal migration flows matched to individual records from the 1940 Census, we examine the impact of positive net migration on the economic welfare of workers along a variety of dimensions.

As is often the case in the modern literature, we find that the impact of in-migration on hourly earnings was small and not statistically significant in the 1930s. However, in-migrants threatened the economic prospects of longer-term residents in other ways. During a decade in which unemployment rates stayed above 10 percent and many workers were unable to find jobs that offered 40 hours of work per week, work hours and access to work relief were highly valued. Residents of metropolitan areas that experienced high in-migration during the Depression decade worked fewer weeks during the year and thus experienced a significant drop in their annual earnings. Although the probability of obtaining a regular job was not reduced, those who were out of work faced greater difficulty in securing a work relief position. Finally, as has been found in the modern era, greater in-migration stimulated out-migration by longer term residents.

The experiences in the Great Depression help to understand why the anticipated economic disruption of in-migration causes resident workers to oppose newcomers to their areas. Workers in cities protested the in-migration of fellow citizens, arguing that all the newcomers could do was make things worse for the existing population. Our findings, which are from an historical period when international immigration fell to a trickle, suggest that localized protests against in-migration would likely still occur today even if our borders were completely sealed. What opponents of immigration today often fail to recognize is that disparities in labor markets across geographic areas causes people to migrate internally, thus affecting labor market outcomes. While the vehemence of the protests might be lessened to some degree if the newcomers happened to be similar in race, ethnicity, and citizenship to the longer-term residents, the economic impact of the migration would still be felt.

    Posted by on Sunday, July 22, 2007 at 12:15 AM in Economics, Unemployment | Permalink  TrackBack (0)  Comments (21)


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