Mass Migration, Cheap Labor, and Innovation

Abstract: This paper studies the effect of emigration on technological advances in sending locations after one of the largest migration events in human history, the mass migration from Europe to the United States in the 19th century. To establish causality, we adopt an instrumental variable strategy that combines local growing-season frost shocks with proximity to an emigration port. Using novel data on technological patents, we find that emigration led to an increase in innovative activity in sending municipalities. Additionally, we find that emigration led to higher unskilled wages in agriculture, an increased adoption of labor-saving technology and a shift towards the nascent industrial sector.