The Impact of Technology and Trade on Migration: Evidence from the U.S.

Marius  Faber; Andres  Sarto; Marco  Tabellini

Working Paper | HBS Working Paper Series | 2019

The Impact of Technology and Trade on Migration: Evidence from the U.S.

by Marius Faber, Andres Sarto and Marco Tabellini

Abstract

Migration has long been considered one of the key mechanisms through which labor markets adjust to economic shocks. In this paper, we analyze the migration response of American workers to two of the most important shocks that have hit Western economies since the late 1990s—import competition from China and the introduction of industrial robots. Exploiting plausibly exogenous variation in exposure across U.S. local labor markets over time, we first verify that both shocks led to a steep reduction in manufacturing employment. Next, we present our main results and show that, on average, robots caused a sizable reduction in population size, whereas trade with China did not. The decline in population size due to robots resulted from reduced in-migration into rather than increased out-migration away from affected areas. In the second part of the paper, we explore the mechanisms behind these results. We show that the two labor market shocks differ in their propagation across industries within local labor markets: while robots caused negative spillovers to service industries, Chinese imports, if anything, favored employment growth outside of manufacturing. We provide suggestive evidence that these propagation patterns are responsible for the differential migration response.

Keywords: migration; employment; Technology; Trade; System Shocks;

Language: English

Format: Print

60 pages

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Citation:

Faber, Marius, Andres Sarto, and Marco Tabellini. "The Impact of Technology and Trade on Migration: Evidence from the U.S." Harvard Business School Working Paper, No. 20-071, December 2019.

Article | Review of Economic Studies | January 2020

Gifts of the Immigrants, Woes of the Natives: Lessons from the Age of Mass Migration

Marco Tabellini

In this paper, I jointly investigate the political and the economic effects of immigration and study the causes of anti-immigrant sentiments. I exploit exogenous variation in European immigration to U.S. cities between 1910 and 1930 induced by World War I and the Immigration Acts of the 1920s as well as instrument immigrants’ location decision relying on pre-existing settlement patterns. I find that immigration triggered hostile political reactions, such as the election of more conservative legislators, higher support for anti-immigration legislation, and lower redistribution. Exploring the causes of natives’ backlash, I document that immigration increased natives’ employment, spurred industrial production, and did not generate losses even among natives working in highly exposed sectors. These findings suggest that opposition to immigration was unlikely to have economic roots. Instead, I provide evidence that natives’ political discontent was increasing in the cultural differences between immigrants and natives. Results in this paper indicate that, even when diversity is economically beneficial, it may nonetheless be socially hard to manage.

Keywords: Political backlash; Age of Mass Migration; cultural diversity; Immigration; History; Economy; Attitudes; Cross-Cultural and Cross-Border Issues; Diversity;

Citation:

Tabellini, Marco. "Gifts of the Immigrants, Woes of the Natives: Lessons from the Age of Mass Migration." Review of Economic Studies 87, no. 1 (January 2020): 454–486. (Also Harvard Business School Working Paper, No. 19-005, July 2018. Available also from Cato Institute, Microeconomic Insights, and VOX.) View Details

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The Impact of Technology and Trade on Migration: Evidence from the U.S.

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