Migration, Population Composition and Long Run Economic Development: Evidence from Settlements in the Pampas

Abstract

This article analyses the impact of population composition on long run economic development, by studying European migration to Argentina during the Age of Mass Migration (1850–1914). I use an instrumental variables (IV) approach that assigns immigrants to counties by interacting two sources of variation: the availability of land for settlement and the arrival of Europeans over time. Counties with historically higher shares of European population in 1914 have higher per capita GDP 80 years later. I show that this long run effect is linked to the higher level of human capital that immigrants brought to Argentina. I show that Europeans raised literacy rates in the receiving counties, and that high‐skilled Europeans played an important role in the onset of industrialisation, owned most of the industrial establishments, and provided the majority of the industrial labour force.

Immigrants and the Making of America

“…Our findings complement recent scholarship examining the selection of immigrants to the United States (e.g., Abramitzky, Boustan and Eriksson, 2012, 2013, Spitzer and Zimran, 2013 and their experiences after arrival (e.g., Abramitzky, Boustan and Eriksson, 2014), as well as the existing literature on the importance of effects of immigration that arise due to culture, genetics, or networks (e.g., Fischer, 1989, Ottaviano and Peri, 2006, Ager and Bruckner, 2013, Grosjean, 2014, Bandiera, Mohnen, Rasul and Viarengo, 2016, Burchardi and Hassan, 2015, Ager and Bruckner, 2017. They also complement existing studies that find long-term benefits of historical immigration outside of the United States, e.g., in Brazil (Rocha, Ferraz and Soares, 2017), Argentina (Droller, 2013), and Prussia (Hornung, 2014).…”

Enemies of the people

“…Similarly, Rocha et al (2017) show that high-skilled immigrants settled to specific regions of Brazil around 1900 via a state-sponsored policy have higher levels of schooling and income per capita today. Droller (2018) shows that European settlers raised literacy rates and helped industrialization in Argentinean counties. Hornung (2014) show that in the late 17th century Prussia, textile firms in areas receiving skilled Huguenots from France experienced increased productivity.…”

Impact of gaming algorithms on the behavior of an individual and regional migration flows

“…Therefore, F. Droller [12] argues that in 1914 in Argentina, in the regions with historically higher shares of European population, GDP per capita increased 80 years later than the European immigrants arrived to Argentina en masse. His calculations show that this long-term effect was associated with a higher level of human capital, which the immigrants brought to Argentina.…”