Global Migration and the World Economy: Two Centuries of Policy and Performance

Published by EH.NET (June 2007)

Timothy J. Hatton and Jeffrey G. Williamson, Global Migration and the World Economy: Two Centuries of Policy and Performance. Cambridge, MA: MIT Press, 2006. xi + 471 pp. $50 (cloth), ISBN: 0-262-08342-6.

Reviewed for EH.NET by Drew Keeling, Department of History, University of Zurich.

For decades, scholars of modern cross-border migration and its history have noted the desirability of broad comparative perspectives, as frameworks for more numerous studies of particular locales and ethnicities. In recent years, economists have led development of a “big picture” approach to the history of international migration, and Jeffrey Williamson and Timothy Hatton have been at the forefront of those economists.

Global Migration and the World Economy, the latest and most exhaustive joint study of this duo, builds on their prior work together and independently, but also breaks important new ground. For instance, most of this new book is not duplicated either in their Age of Mass Migration (1998) or in Williamson and Kevin O’Rourke’s collaboration, Globalization and History (1999).

The book is divided into four sections by time period: the nineteenth century rise of global migration, the early twentieth century fall, the late twentieth century “rise again,” and a final section examining contemporary migration trends and future alternatives. Ten of eighteen chapters concern the period since 1914, and among the book’s strengths are its many insightful comparisons between the post World War II period and the “first global century” that ended with World War I.

Using an impressive combination of original theory, statistics, and logic, and incorporating a broad array of findings from other scholars, the authors dissect the economic fundamentals underlying international mass migration. They deploy their multi-pronged analysis across the vicissitudes of the modern migratory age: through shifts in origin countries, the transformation from industry to services in destination country economies, the growing importance of asylum-seeking and illegal migration, and the emergence of policy regimes that have become more restrictive, more sophisticated, and more difficult to effectively administer. A solid historical perspective informs a thorough examination of contemporary issues: from the importance and limitations of immigration regulations in shaping the magnitudes and character of migration, to democratic disconnections between public opinion and public policies on migration, to the complex offsets and feedbacks between education and mobility, skilled and unskilled labor, and the “brain drain” and remittances. Global Migration and the World Economy is chock full of precise and salient questions, and takes at least a stab at most of them, although it is often a challenge for the reader to keep track of which among a shifting multitude of open issues is being addressed, or where it has already been addressed.

A tour de force summation of economic history literature on migration will make this an excellent reference source for future researchers. The coverage is particularly thorough on recent publications, through about 2004, which lends this volume an impressive “cutting edge” character, but also makes its conclusions tentative in a number of places. This suggests the possibility of an eventual second edition, which would also provide an opportunity to correct ambiguities in a few of the otherwise generally helpful “supply and demand” graphs or “box diagrams” and to redress overstatements such as “the labor market effect of immigration has always been the key focus in debate over immigration policy.” That remark, on page 289, is difficult to reconcile with the finding, on page 359, that “prejudice against those of a different race and culture is the most important influence on attitudes towards immigrants.”

The topical coverage is very wide, although less so than the title might suggest. Migration’s overlaps with international trade are treated more extensively, for instance, than its impacts on economic growth or its interactions with demographic and environmental factors. A more functionally descriptive title might be “the economic causes and consequences of global migration since 1815,” and in that important category this significant book has few peers, if any.

While an impressive work overall, some parts of Global Migration are problematic. The authors appropriately stress the importance of labor markets, which have been underappreciated in most of the migration historiography, but apply an incomplete corrective. They say little about labor demand, stressing labor supply instead, and attributing even more significance to factors exogenous to labor markets (such as travel costs, famines, wars, and government policies). At the core of their historical explanation for “what drove migration” is a model in which potential migrants in poorer countries are stuck in a “poverty trap” until they can find a way to “escape” it, with the help of higher wages, government subsidies, foreign remittances or lower ticket prices. Undoubtedly, relocation costs have always been a consideration in long-distance cross-border migration decisions, and were, in general, a more serious constraint the further back in time one looks, but the Hatton and Williamson model imputes to them a centrality beyond that established by their data. Rising wages across the nineteenth-century Atlantic basin lowered the real costs of travel, new travel technologies reduced travel times, the sources of Europe’s overseas emigrants shifted southward and eastward to regions more remote from New World destinations, and there was a long term secular shift towards lower average labor market “skills” amongst transatlantic migrants. All of this is consistent with a declining cost barrier to migration. But how big a role did that barrier play to begin with, at the outset of the “first global century,” e. g. circa 1830? The truth is, no one seems to really know for sure yet, including Hatton and Williamson. There is no model here explicitly assessing the relative importance of factors, including travel affordability, which distinguished stayers from leavers, there is no clear distinction between wanting to migrate and being able to migrate, and the cost data presented are quite incomplete.

The authors’ claim that “during the great transition from trickle to flood, it was the decline in steerage rates and in the time in passage that mattered most,” but there are at least two problems with this theory as they present it. Firstly, most nineteenth century overseas migrants left from Europe, most of those European emigrants moved to the United States, and the all-time peak in U.S. immigration relative to population was in the early 1850s, a time when very few migrants yet reached America on the steamships which cut oceanic travel times by two thirds or more. Steamships did not take more steerage passengers to the U.S. than sailing ships until 1865. Secondly, the supporting passage cost data presented in Global Migration do not include most available sources of such figures, such as the fares compiled by Kristian Hvidt (1971) or Arnold Kludas (1986) showing an increase in North Atlantic transit fares after 1900 that coincides with an even sharper rise to the second highest all-time peak in the U.S. immigration rate.

Hatton and Williamson deal authoritatively with the expected net benefits of migration, but have little to say about how the variance and uncertainties of such net benefits also have been important to voluntary international migrants. Uncertainties and fears ? of mass amnesty, or of millions forced to live outside the law ? have played a role in recent U.S. immigration policy debates. Long-distance transnational migration itself has long and rightly been regarded as a great gamble. Smuggled migrants crossing Arizona’s deserts or the waters between Africa and Europe clearly confront substantial risks. Risk considerations have been convincingly suggested as contributing factors to past mass migration trends, such as the record high rate of Irish emigration in the early 1850s, for example, or the strong and persistent drop in German emigration after 1890. The causal role of pitfalls and anxieties, about leaving or staying or both, receive little attention in this book, however.

The discussion on pre-World War I economic “convergence” between immigrant-sending and immigrant-receiving countries is not entirely clear-cut. Williamson’s path-breaking international real wage comparison data set, gathered in the early 1990s and focused on 1870-1913, apparently still lacks coverage of two immigrant source countries which were major contributors to the massive migration “peak” of 1900-1913, Russia and Austria-Hungary. Many of the convergence examples actually cited, moreover, are comparisons within Europe rather than between Europe and the New World. This important distinction is often blurred.

The authors nonetheless do make a persuasive case (for the nineteenth century and today) that chain migration, demographic transitions, travel costs relative to source incomes, and government policies are more significant than wage gaps in “driving” migration, but that international labor market migration, if sufficiently massive, has generally reduced global economic inequality between poor and rich countries. This migration-induced convergence has tended to come at the cost of rising inequality within richer destination countries, however. Subject to some notable distinctions and qualifications, the authors also reach similar conclusions regarding “south-to-south” migration, e.g. movement between less-developed countries.

The chapter on the early twentieth century “backlash” against immigration suffers from a conflation of attitudes and intentions (on the one hand) with effective policies (on the other). Based on a model quantifying “policy stance” rather than “policy impact,” Global Migration plausibly indicates that “labor market fundamentals,” e.g. the negative effect of immigration on wages of the native-born were, after all, more important than xenophobia or racism in producing a gradual shift in favor of restricting European migration to the New World by the early twentieth century. Contrary to the assertions in this chapter, however, (although not the immediately following chapter on the impacts of the” backlash”) the decade 1915-24 saw dramatic changes in the policies actually adopted in the U.S., the destination of most transatlantic migrants in the century before World War I.

On the eve of that war, gradually increasing exclusion of limited categories of arriving Europeans had raised the debarment rate at U.S. entry ports to a still near negligible 2%. During the war, in contrast, U.S. immigration dropped by over 75%. The 1920s quota laws which soon followed were explicitly and successfully designed to eliminate most of the influx from Southern and Eastern Europe which had accounted for a large majority of the 15 million American immigrants of 1894-1914. As the authors rightly observe, American immigration quotas were largely redundant during the Great Depression and World War II, but nonetheless did have major restrictive effects in the 1920s and 1950s. The shifting constellations of political party strategies and interest groups which enabled significant fulfillment of growing popular sentiment against immigration to the U.S. by the 1920s, but not before, was chronicled in John Higham’s Strangers in the Land half a century ago. It remains a useful study still today, but is not mentioned in Global Migration. The counterfactual question of whether ? absent the world wars, the 1930s depression, and the U.S. quotas ? immigration from Europe might have dwindled anyway after 1920, is one of many examples of provocative and interesting issues raised by the book, but not resolved, due to unavoidable space limitations.

Hatton and Williamson do not, however, duck complicated and controversial concerns about labor migration negatively affecting native employment and wage levels. In several different historical contexts, they unravel the often indirect ways this occurs (such as inflows of foreigners helping to stimulate regional relocations of natives). Nonetheless, the authors also make a convincing case that the net overall effect of cross-border migration has tended to be economically beneficial: not just for migrants but also for the countries they move out of and into.

The potential receptivity of contemporary policymakers and opinion-shapers to these judicious conclusions is another matter. The authors’ stated desire to reach that set of audiences might have been more effectively served had there been a bit more attention devoted to how labor migrants import language, culture, ideas, and so forth, along with their job skills. Migrants come for work, but then often also become neighbors, taxpayers, users of public services, parents of school children, citizens and voters, and these developments, in turn, have economic impacts well beyond the fiscal impacts (which are treated authoritatively here). The cogent final section, on contemporary policy issues, has much to recommend it, but it is questionable how much of the preceding 340 pages policy formulators might read en route to it. Complex historical insights and practical politics do not mix easily in any case, however.

A more avoidable shortcoming is the relative absence of questions addressed by migration historians. This book is loaded with material casting doubt upon non-economic historians’ often implicit assumptions that narrow slices of the migration picture suffice to illuminate the whole. But, the argument for the big picture rather than the narrow case study is never quite engaged.

Scholarship from outside of economic history but addressing migration history broadly is also given little weight. One cannot expect a book of this scope to cover all bases, but not mentioning Markus Hansen, Philip Taylor or Daniel Tichenor, for example, somewhere in four hundred pages suggests a lost opportunity. Dirk Hoerder’s nine hundred page Cultures in Contact, published in 2002, has several references to Wallerstein, but none to Williamson, or Hatton. Global Migration and the World Economy talks at some length about Heckscher, but makes no mention of Hoerder. This divergence of History and Economics is undoubtedly yielding gains from specialization, but also implies unrealized potential gains from trade. A better appreciation of the inherently interdisciplinary and historical nature of this deeply personal and interpersonal, psychological, cultural, and even biological phenomenon would enrich models and analyses built around economic aggregates. A firmer and more nuanced understanding of migration’s economic fundamentals, and a greater awareness of their central role, would enhance historians’ investigations of international human relocation.

Historians should read Global Migration and the World Economy, because sooner or later, they are likely to be called upon to more directly confront some of the crucial issues it raises. An interconnected world of demographic challenges, resource limitations and increasing climate disruptions, for example, is going to be a world where cross-border mass migration will be about much more than ethnic identities, culturally diffusing diasporas, or even elegantly contingent narratives. Even if ? as Hatton and Williamson realistically conclude ? the historical record offers no “easy solutions to the world migration problems” of the near future, it seems a reasonably safe bet that coming global migration challenges, whatever else they do, will also stoke desires for geographically broad historical insights.

Notwithstanding its unevenness, and sometimes overstated conclusions, the sweep and incisive power of this book make it likely to remain a point of reference for years to come. It will probably receive more attention within the fields of economics and economic history than outside of them, but the long run prospects for interdisciplinary “convergence” on the causes and effects of global migration are improved by this ambitious and far-reaching scholarly contribution.

Drew Keeling received his Ph.D. in History from the University of California, Berkeley in 2005, and is now an instructor in the History Department at the University of Zurich. His dissertation, “The Business of Transatlantic Migration between Europe and the USA, 1900-1914” was awarded the 2005 Gerschenkron Prize of the Economic History Association. Two related publications are forthcoming later this year: “Costs, Risks, and Migration Networks between Europe and the United States, 1900-1914,” in Research in Maritime History, and “Transport Capacity Management and Transatlantic Migration, 1900-1914,” in Research in Economic History.