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Summary EH101 MT4 Readings
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- EH101 (EH101)
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- London School Of Economics (LSE)
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MT4 EH101 Essential ReadingsImmigration in American Economic History in Journal of Economic Literature
Author: Abramitzky, Ran
Outline the historical validity of the Roy model for emigration to the US prior to 1920. Why might it work
better in some circumstances that others? Find three pieces of evidence to support your answer.
Introduction
The US has been known to be economically prosperous, and attracts immigrants due to that, but in
the past and today, native US citizens state that immigrants lower wages and they cannot integrate
into society well.
“The United States has long been perceived as a land of opportunity, a place where prospective immigrants
can achieve prosperity and upward mobility. Yet, both in the past and today, US natives have expressed
concern that immigration lowers wages and that new arrivals fail to assimilate into US society.”
The nature of movement in countries has been a mix of positive and negative reasons over time,
based on skill; now, it is more positive, on more recognisable characteristics.
“past, migrant selection patterns were mixed, with some migrants positively and others
negatively selected from their home countries on the basis of skill, migrants today are
primarily positively selected from source-country populations, at least on observable
characteristics.”
Income inequality has increased in the US because there are more people immigrating to get jobs based
off high wages for skilled workers. More recently, there are no negatively chosen immigrants like
refugees as there are higher costs of entry due to strict immigration laws and the variety in immigration
laws that prevent people to move.
“The rise in income inequality in the United States can help explain the increasingly positive selection of
immigrants seeking to take advantage of the high returns to skill in the United States. But the fact that recent
immigrants are not negatively selected—even from destinations that are more unequal than the United States,
as would be predicted by the classic Roy model of self-selection—may be explained by the growing selectivity
of US immigration policy over time, or by rising costs of (often undocumented) entry due to strict immigration
restrictions.”
In the 1900s, the long-term immigrants held the same jobs as those native to the US, whereas today,
immigrants earn less money than native Americans.
“The major difference between the past and present is that, circa 1900, typical long-term immigrants held
occupations similar to the native born, even upon first arrival, whereas today the average immigrant earns less
than natives upon arrival to the United States.”
Both in the past and presently, immigrants tend to reduce the wages of some people native to the US,
but there is no evidence showing that immigrants negatively affect the economy. Immigrants create
winners and loser in the economy.
“both then and now, immigrants appear to reduce the wages of some natives, but the evidence does not
support the view that, on net, immigrants have negative effects on the US economy… new arrivals created
winners and losers in the native population and among existing immigrant workers, reducing the wages of low-
skilled natives to some degree, encouraging some native born to move away from immigrant gateway cities,
and either spurring or delaying capital investment. In the past, these investments took the form of new
factories geared toward mass production, whereas today immigrant-receiving areas have slower rates of
skilled-biased investments (e.g., computerization).”
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