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The Biggest Immigration Wave in US History Had Huge Economic Benefits, Study Shows

CARLY CASSELLA
18 MAR 2019

Over a hundred years ago, from 1850 to 1920, the United States of America experienced a wave of mass migration like never before - the highest levels in its history.

While the topic of immigration remains a divisive issue to this day, we now have some interesting evidence to add to the mix. A new study has found that US counties with more historical immigration enjoy better economies.

 

"In 1850, at the onset of the Age of Mass Migration, over 90 percent of the foreign born living in the US were from either Great Britain, Ireland, or Germany. By the end of the Age of Mass Migration, in 1920, this figure was only 45," the team explained.

"While previous waves [of immigrants] were primarily from western Europe, the new wave included large numbers of immigrants from southern, northern, and eastern Europe who spoke different languages and had different religious practices."

Today, if it weren't for that huge wave, some parts of the US would look far less fortunate.

Not only has immigration increased individual incomes in these counties, the study found it has also reduced unemployment and poverty while improving education and populating urban areas.

What's more, the sudden influx of eastern, northern and southern Europeans did not somehow unbalance the social fabric of the country.

The researchers found no evidence that historical immigration affects social capital, voter turnout, or crime rates.

"What is fascinating is that despite the exceptionalism of this period in US history, there are several important parallels that one could draw between then and now," says development economics research Sandra Sequeira from The London School of Economics and Political Science.

 

"[These parallels are] the large influx of unskilled labour, the small but important inflow of highly skilled innovators, as well as the significant short-run social backlash against immigration."

Examining data from a panel of US counties from 1850 to 1920, the researchers estimated the percentage of people with foreign descent born every decade.

Because immigrants usually travelled by rail to their destinations, the researchers focused their attention along the country's train network. Their findings reveal that soon after the arrival of immigrants, these regions experienced an industrial boom and long-term prosperity.

Nearly a hundred years later, these counties are still enjoying enormous economic benefits. Using this historical data, the researchers suggest that on average, when the number of immigrants in a county went up by just 4.9 percent, it increased the average income by 13 percent today.

Of course, it also completely rearranged American society. Between 1880 and 1914, over 20 million Europeans migrated to the US, at a time when the country only had 75 million residents.

Still, it's an example of how change, even when it's disruptive, can have beneficial effects in the long term. While it's true that this wave of immigration did spur a short-term ant-immigration backlash - both politically and socially - in the long run, the economic benefits appear to far outweigh the social costs, which tend to fade with time.

 

Unfortunately, like many other political issues, the current debate around immigration in the US is almost primarily focused on the wrong thing. Instead of giving our attention to the short-term, the new research suggests we should look at the bigger picture.

Sure, the mass wave of immigration that occurred nearly a century ago was under different circumstances, but even still, the authors think it might be relevant now.

"There is much to be learned from taking a longer perspective on the immigration debate," says Sequeira.

This study has been published in the Review of Economic Studies.