The Age of Mass Migration: Causes and Economic Impact

Published by EH.NET (September 1998)

Timothy J

. Hatton and Jeffrey G. Williamson, The Age of Mass Migration:

Causes and Economic Impact. New York and Oxford: Oxford University Press,

1998. ix + 301 pp. $49.95, ISBN: 0-19-511651-8.

Reviewed for EH.NET by Joshua L. Rosenbloom, Department of Economics,

University of Kansas, and National Bureau of Economic Research.

Between 1850 and 1914 about 55 million Europeans left home for the Americas or

Australasia. This unprecedented voluntary redistribution of population was the

subject of extensive study at the time, and remains of interest to historians

and other social scientists today. In this book Timothy Hatton,

Professor of Economics at the University of Essex, and Jeffrey Williamson,

Professor of Economics at Harvard University, present the results of their

reexamination of the causes and consequences of migration in the late

nineteenth and early twentieth centuries. Their approach is quantitative and

social scientific, eschewing micro-detail in pursuit of systematic patterns

and central tendencies.

Drawing on a broad array of quantitative evidence Hatton and Williamson provide

new support for many hypotheses while overturning quite a few more.

The work they report here is important and will be necessary reading for anyone

interested in historical or contemporary migration topics or the historical

development of labor markets. Although the authors suggest that a better

understanding of the era of mass migration will shed new light on contemporary

immigration controversies, it is less clearly successful in achieving this

goal. An accurate understanding of historical context is almost always

valuable, but I doubt that anything in this book would directly alter one’s

analysis or understanding of contemporary migration phenomena.

After two introductory chapters that lay out the major issues and summarize the

key findings, the rest of the book divides into two parts. The first

part–chapters 3 through 6–examines the causes of migration. The second

part–chapters 7 through 11–focuses on the effects of migration on both

receiving and sending regions.

The analysis of the causes of migration opens with an examination of the

determinants of variation in long-run gross emigration rates from 12 European

countries between 1850

and 1913. A variety of hypotheses about the determinants of migration are

first laid-out, and then tested using a panel-regression framework. In a major

advance over previous work, the regressions make use of internationally

comparable real-wage data for sending and receiving regions constructed by

Williamson. The strong positive effect of relative real wages provides a

compelling confirmation of the importance of economic incentives in encouraging

migration. But the regressions also demonstrate that

a number of other non-wage factors were important. In particular, they reveal

that demographic shocks, the assistance of friends and relatives living

overseas, the progress of industrialization at home, and the rate of migration

in the recent past all had a significant effect on the rate of emigration.

Overall the model does a good job of accounting for inter-country variations in

emigration rates. It appears that differences in the explanatory variables are

sufficient to account for both the very high rates of emigration from Ireland

and Scandinavia and the very low rates of emigration from France. Only four

countries–Italy, Spain,

Portugal, and Belgium–require the addition of separate intercept terms to

account for their level of emigration. The

estimates also illuminate the sources of the characteristic inverted-U shape

pattern of emigration rates found for most countries, which appears to have

arisen from the systematic evolution of several of the explanatory variables as

each country passed through the process of industrialization.

In chapters 4 through 6 the authors extend their model of emigration to account

for short-run variations in the timing of migration and apply it to the

experience of a range of different countries. Chapter 4 elaborates a

short-run model incorporating the effects of employment conditions at home and

abroad into the general framework developed earlier, and estimates it using

data from the United Kingdom and three Scandinavian countries.

Chapter 5 explores Irish emigration after the famine, while Chapter 6

considers the case of Italian emigration. The results in each case are

consistent with those obtained from the panel regressions reported in Chapter

3, while confirming that short-run fluctuations in the timing of emigration

were influenced by variations in relative unemployment levels.

Because adequate data on unemployment are not readily available in all cases,

however, estimation of these models leans heavily on the use of proxies, some

more adequate than others. In the case of Ireland, for example, it is

necessary to use deviations of agricultural output from its trend. It is not

obvious that this measure should be closely related to unemployment rates,

however, and no support for this substitution is offered in the text.

Despite the broad similarity in approach for these different country studies,

there is no explicit attempt to compare or contrast them in the text.

Annoyingly, the regression results in each chapter are reported in slightly

different for mats, and there is no attempt to assemble the results in a

coherent fashion. While the results for the different countries are similar in

many respects I was struck by some of the differences in coefficient estimates.

For example, it would appear that the stock of migrants living abroad had an

effect on emigration from the United Kingdom and Ireland several orders of

magnitude larger than it did for Italy or the Scandinavian countries. Why this

should be true is not immediately apparent.

The second half of the book shifts the focus from the causes of migration to

its consequences on receiving and sending regions. Two chapters (7 and 8)

examine the United States, one of the chief destination countries.

Chapter 7 explores the progress of immigrant assimilation, a topic that

attracted considerable contemporary concern, and has also generated a large

historical literature. While a number of recent studies have found little

evidence of immigrant assimilation (as measured by the gap in earnings relative

to the native born), Hatton and Williamson reach a more optimistic conclusion

on this subject. Arguing that the quadratic age-earnings profiles estimated in

earlier studies are misspecified, Hatton and Williamson show that once a more

realistic specification is adopted wage gaps appear to have closed relatively

quickly for older immigrant groups.

Although the newer immigrant groups who predominated after 1890 did start at a

significant wage disadvantage relative to the native born,

Hatton and Williamson conclude that this was due largely to their lower skill

levels, and find that there is nonetheless evidence that wage gaps closed over

time.

Chapter 8 considers the impact of immigration on Americans. Here Hatton and

Williamson argue that immigrants competed directly with less skilled

native-born workers, and although migration was sensitive to short-run economic

fluctuations it did little to moderate variations in unemployment rates over

the business cycle. These facts suggest that immigration should have tended

to lower American wage levels. Using a partial equilibrium framework, they

suggest that by 1910 American wages would have been 5 to 6 percent higher in

the absence of immigration after 1890, or 11 to 14 percent higher if there had

been no immigration after 1870.

Chapters 9 and 10 introduce a general equilibrium framework to analyze the

impact on sending regions, and the contribution of migration to the substantial

wage convergence which occurred during the late nineteenth century. The

general

equilibrium framework allows the authors to assess the relative contributions

of factor price equalization and labor mobility in producing wage convergence.

Both trade and migration emerge as important factors in explaining the

narrowing of international wage gaps, although their relative importance

varies from country to country. The general equilibrium framework also helps

to highlight the extent to which the impact of migration depends on the

counterfactual world against which events are to be compared. In particular,

the late nineteenth century was characterized by considerable capital as well

as labor mobility, and the fact that capital

“chased” labor from the Old to the New World substantially offset the extent of

wage convergence. Had capital

not been mobile, migration would have produced even more dramatic convergence

than it actually did. These findings suggest that, at least for this period,

forces of globalization may have been more important than technological

convergence, which has figured so prominently in recent discussions of the

sources of international differences in real incomes.

On the face of it, these results seem plausible. But it is difficult to

adequately assess them, both because of the complexity of the general

equilibrium

models on which they rest, and the fact that many of the details needed to

evaluate the models are not explicitly discussed in the book. Rather, curious

or skeptical readers will be obliged to refer to a series of other articles to

track down these facts.

In chapter 11, the authors consider the impact of population redistribution on

inequality. The chapter makes an important conceptual point: that discussions

of migration’s effects on inequality have generally taken too narrow a view by

focussing on a single country. Much more light can in principle be shed on

the question by considering the simultaneous effects on both sending and

receiving countries. The chapter is less successful,

however, at resolving the empirical question of how migration affected

inequality trends in different countries. A priori we might expect that

immigration would tend to reduce inequality in labor-abundant Old World

countries while raising it in labor-scarce New World countries. Hatton and

Williamson argue that this

is the case, based on the behavior of wage-land value and wage-GDP per worker

hour ratios–both of which tended to fall in destination countries and rise in

source countries. But this evidence is not entirely convincing given the large

volume of international capital flows. Since Old World capitalists were able

to benefit from high rates of return on New World investments it is not obvious

what these ratios reveal about income inequality trends within countries.

As an analysis of the causes and consequences of migration in the late

nineteenth and early twentieth centuries, this book is an important

contribution to the literature. It offers a comprehensive quantitative

analysis that substantially extends and modifies our understanding of this

important historical epoch. The conclusions and conjectures here should

provide much food for thought and subsequent study.

Joshua L. Rosenbloom Department of Economics University of Kansas and National

Bureau of Economic Research

Joshua L. Rosenbloom is author of “Strikebreaking and the Labor Market in the

United States, 1881-1894,” Journal of Economic History 58 (Mar.

1998), and “Was There a National Labor Market at the End of the Nineteenth

Century? New Evidence on Earnings in Manufacturing,”

Journal of

Economic History 56 (Sept. 1996); as well as numerous other articles on the

history of U.S. labor markets.