Mass Migration, Cheap Labor, and Innovation

• Migration is often depicted as a major problem for struggling developing countries,as they may lose valuable workers and human capital. Yet, its effects on sendingregions are ambiguous and depend crucially on local market responses and migrantselection. This paper studies the effects of migration on technological innovation insending communities during one of the largest migration episodes in human history:the Age of Mass Migration (1850–1913). Using novel historical data on Sweden, whereabout a quarter of its population migrated, we find that migration caused an increasein technological patents in sending municipalities. To establish causality, we use aninstrumental variable design that exploits severe local growing season frost shocks to-gether with within-country travel costs to reach an emigration port. Exploring possiblemechanisms, we suggest that increased labor costs, due to low-skilled emigration, in-duced technological innovation.

Ämnesord

SAMHÄLLSVETENSKAP  -- Ekonomi och näringsliv -- Ekonomisk historia (hsv//swe)

SOCIAL SCIENCES  -- Economics and Business -- Economic History (hsv//eng)

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