Immigration and the Demographics of the United States
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1 Immigration and the Demographics of the United States Number of immigrants entering the United States, J. Parman (College of William & Mary) American Economic History, Spring 2012 April 12, / 42
2 The Economic Impacts of Immigrants So levels of immigration were incredibly large historically Many of these immigrants were pushed by poor economic conditions in their home countries Many were pulled by the promise of good economic conditions in the United States But what influence did the immigrants themselves have on economic conditions? Clearly they increased the size of the labor force, but that isn t the only way they impact the economy J. Parman (College of William & Mary) American Economic History, Spring 2012 April 12, / 42
3 Immigration and the Capital-Labor Ratio Immigrants add to the stock of labor in the US but not the stock of human capital This would imply that immigrants lead to a decrease in the capital-labor ratio Less capital per worker makes capital relatively more productive/valuable and labor relatively less productive/valuable So we could see the price of capital rise and the price of labor fall J. Parman (College of William & Mary) American Economic History, Spring 2012 April 12, / 42
4 Immigration and the Capital-Labor Ratio In the modern economy, estimates put the gain to native capital owners at 2% of GDP and the loss to native workers at 1.9% of GDP Why might this be different historically? Immigrants were often capital owners (self-employed farmers, shop owners, or manufacturers) Workers owned capital assets through insurance policies (basically pension funds) It seems that the influx of immigrants did not lead to lower capital per worker J. Parman (College of William & Mary) American Economic History, Spring 2012 April 12, / 42
5 Immigration and the Capital-Labor Ratio J. Parman (College of William & Mary) American Economic History, Spring 2012 April 12, / 42
6 Immigration and the Human Capital Stock Immigrants weren t just additional workers identical to domestic workers They were typically young adults who had already made investments in human capital They also had a higher labor force participation rate These characteristics increased their contribution to American economic growth J. Parman (College of William & Mary) American Economic History, Spring 2012 April 12, / 42
7 Immigration and the Human Capital Stock J. Parman (College of William & Mary) American Economic History, Spring 2012 April 12, / 42
8 Immigration and the Human Capital Stock J. Parman (College of William & Mary) American Economic History, Spring 2012 April 12, / 42
9 Immigration and the Human Capital Stock Other countries took care of the costly investment in human capital (the costs of caring for and educating children) America received the benefits of that investment without having to pay for it Neal and Uselding calculated the benefits of being able to use those resources that would have been needed for human capital investment on physical capital investment instead Their estimates, immigration contributed as much as 9% of the capital stock in 1850 and up to 42% by 1912 J. Parman (College of William & Mary) American Economic History, Spring 2012 April 12, / 42
10 Internal Migration J. Parman (College of William & Mary) American Economic History, Spring 2012 April 12, / 42
11 Internal Migration J. Parman (College of William & Mary) American Economic History, Spring 2012 April 12, / 42
12 Internal Migration J. Parman (College of William & Mary) American Economic History, Spring 2012 April 12, / 42
13 Internal Migration J. Parman (College of William & Mary) American Economic History, Spring 2012 April 12, / 42
14 Internal Migration J. Parman (College of William & Mary) American Economic History, Spring 2012 April 12, / 42
15 Internal Migration J. Parman (College of William & Mary) American Economic History, Spring 2012 April 12, / 42
16 Why Encourage Westward Migration? J. Parman (College of William & Mary) American Economic History, Spring 2012 April 12, / 42
17 Why Encourage Westward Migration? J. Parman (College of William & Mary) American Economic History, Spring 2012 April 12, / 42
18 Why Encourage Westward Migration? J. Parman (College of William & Mary) American Economic History, Spring 2012 April 12, / 42
19 Why Encourage Westward Migration? J. Parman (College of William & Mary) American Economic History, Spring 2012 April 12, / 42
20 Why Encourage Westward Migration? J. Parman (College of William & Mary) American Economic History, Spring 2012 April 12, / 42
21 Why Encourage Westward Migration? J. Parman (College of William & Mary) American Economic History, Spring 2012 April 12, / 42
22 Internal Migration US Urban and Rural Populations, ,000, ,000,000 Urban 160,000,000 Rural 140,000, ,000, ,000,000 80,000,000 60,000,000 40,000,000 20,000, J. Parman (College of William & Mary) American Economic History, Spring 2012 April 12, / 42
23 Historical Internal Migration The biggest trend in internal migration was the spread of the population westward The spread west was encouraged by the availability of land, higher potential incomes, and government programs (for example, the Homestead Act) In addition to the trend of people moving west, a strong trend in internal migration has been rural to urban migration Internal migration in general was driven by job opportunities, higher incomes, land availability, distance, and the similarity of new locations to old ones Over time, income and job opportunities have become more important in explaining migration flows, land availability has explained less and less J. Parman (College of William & Mary) American Economic History, Spring 2012 April 12, / 42
24 Internal Migration J. Parman (College of William & Mary) American Economic History, Spring 2012 April 12, / 42
25 Internal Migration Generated from J. Parman (College of William & Mary) American Economic History, Spring 2012 April 12, / 42
26 Internal Migration Generated from J. Parman (College of William & Mary) American Economic History, Spring 2012 April 12, / 42
27 Modern Internal Migration There is still a significant amount of internal migration in the United States People move for jobs, for education, cost of living considerations, etc. The historical flow of people out of rural areas has continued (to the extent that a new Homestead Act has been proposed) Internal migration has serious consequences for local economies (issues of brain drain, housing bubbles, etc.) J. Parman (College of William & Mary) American Economic History, Spring 2012 April 12, / 42
28 States with greatest inflow of people J. Parman (College of William & Mary) American Economic History, Spring 2012 April 12, / 42
29 Foreclosures by state, 2009 J. Parman (College of William & Mary) American Economic History, Spring 2012 April 12, / 42
30 Race and Internal Migration J. Parman (College of William & Mary) American Economic History, Spring 2012 April 12, / 42
31 Race and Internal Migration J. Parman (College of William & Mary) American Economic History, Spring 2012 April 12, / 42
32 Internal Migration of the White Population t migration (in thousan nds) Net South White NE White NC White West White J. Parman (College of William & Mary) American Economic History, Spring 2012 April 12, / 42
33 Internal Migration of the Black Population 1000 migration (in thousand ds) Net South Black NE Black NC Black West Black J. Parman (College of William & Mary) American Economic History, Spring 2012 April 12, / 42
34 Race and Internal Migration Once again, the economic history of the black population looks quite different than that of the white population The black population went through a dramatic period of internal migration known as the Great Migration After emancipation, blacks did not immediately leave the South despite poor economic conditions Between 1870 and 1910, only 535,000 blacks left the South Between 1910 and 1940, 3.5 million blacks left the South In 1900, 4.3% of blacks born in the South lived outside of the South, by 1950 it s 20.4% J. Parman (College of William & Mary) American Economic History, Spring 2012 April 12, / 42
35 Why Was Black Migration Delayed? Relative Wage Levels by Region, Northeast Midwest West South J. Parman (College of William & Mary) American Economic History, Spring 2012 April 12, / 42
36 Why Was Black Migration Delayed? Relative Wage Levels by City New York Chicago Philadelphia Richmond J. Parman (College of William & Mary) American Economic History, Spring 2012 April 12, / 42
37 Why Was Black Migration Delayed? Term of Occupancy of Share Tenants, 1910 South Atlantic East South Central Years on farm White Black White Black Less than % 33.9% 45.6% 39.9% 1 year years years years and over J. Parman (College of William & Mary) American Economic History, Spring 2012 April 12, / 42
38 Why Was Black Migration Delayed? It doesn t look like Southern blacks were particularly averse to moving There is evidence of a fair amount of movement within the South Average wages and job opportunities certainly seemed better in the Northern cities Eventually, blacks would move to take advantage of those economic opportunities So why the 50 year delay? J. Parman (College of William & Mary) American Economic History, Spring 2012 April 12, / 42
39 Why Was Black Migration Delayed? One possible explanation is the influence of immigration From emancipation up until the early 20th century, there were large flows of immigrants into Northern cities More immigrants could do two things to the economic prospects of blacks: Drive down wages by increasing overall labor supply Decrease the probability of getting a job if white Europeans were preferred by employers to blacks When the flow of immigrants declines, the levels of black migration rise J. Parman (College of William & Mary) American Economic History, Spring 2012 April 12, / 42
40 Why Was Black Migration Delayed? immigration Net i NtI Net Immigration Black Migration from South Net black mig gration out of South J. Parman (College of William & Mary) American Economic History, Spring 2012 April 12, / 42
41 Why Was Black Migration Delayed? Classified ad in The New York Times, March 25, 1854 J. Parman (College of William & Mary) American Economic History, Spring 2012 April 12, / 42
42 Why Was Black Migration Delayed? J. Parman (College of William & Mary) American Economic History, Spring 2012 April 12, / 42
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