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Summary Emerging Economies and Global Labour
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Summary Emerging Economies and Global Labour CH2203. Erasmus University Rotterdam
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Week 3Literature
Timothy J. Hatton and Jeffrey G. Williamson, ‘What drove the mass migrations from
Europe in the late nineteenth century?’, Population and Development Review (1994)
20, 3.
Introduction
- The article wants to explain the effects of the nineteenth century emigration from
Europe with relative real wages data
Important questions:
1. why were emigration rates not always highest in the poorest country?
2. why did emigration rates often rise as successful development took place at home? (why
not stay if wages are getting higher?)
To explain these counterintuitive events, 3 hypothesis:
1. path-development: current emigration is determined by past emigration and help from
friends and family already abroad.
2. propensity to emigrate can be positively related to economic development at home because
real wage catch up can provide financial means to move and attitudes toward labour mobility
can change
3. ‘safety valve’: population growth directly increased emigration rates
Explanations from literature for European emigration
- Easterlin (1961): emigration and population growth positively correlated
o 20-year lag: natural increase in population 20 years ago as a proxy for the
current changes in the labor market because if there are high additions to the
market (other things remaining equal) the labour market will slack (slower
growth in wages) so emigration will increase
- New data on wages offers new analyses, they find that:
o Overall, there is a weak correlation between home wages and emigration
o The authors suggest to look at wage convergence, not just home wages
But this is still unsatisfactory – additional factors for explanation need
to be included
What about industrialization?
,Real wage gaps do not suffice, so what additional variables need to be included in the model
to account for late nineteenth century European emigration to the New World?
Consider:
1. cost of migration
- supply constraint VS demand constraint
2. process of diffusion
- regional convergence
3. persistence (stability after industrialization)
- ‘friends and relatives effect,’ chain migration
- Well documented in remittances, pre-paid tickets, letters
What abour ‘rural exodus’?
The model: explaining the variables
1. wh/wf: home to destination real wage gap
2. RNI natural increase/demographic change was found important as argued by EAsterlin
3. Sa: level of industrialization (labor force in agriculture)
4. MST: stock of migrants living abroad
5. M: dependable lagged variable
Conclusions
- Inverted U – life cycle of emigration in a country, intended to explain why and when
emigration happened. What forces drive the U shape?
o For example, to explain why, in a period of upswing in wages, emigration
happened
o To search for an explanation of emigration peaks, and wages/wage gaps at the
time
- They find three important variable
o Industrialization, demographic transition, and impact of migrant stock
In early phases of emigration, these variables outweighed convergence of wages.
As these variable weakened, real wage convergence dominated
In late phases, as wages caught up, emigration rates slowed down
The article "What drove the mass migrations from Europe in the late 19th century?" by
Timothy J. Hatton and Jeffrey G. Williamson, explores the reasons behind the significant
migration of people from Europe to other regions of the world during the late 19th century.
, The authors analyze various economic, social, and demographic factors that influenced this
migration, including population growth, labor market conditions, and changes in
transportation technology.
In terms of population growth, the authors note that Europe's population grew rapidly during
the 19th century, leading to a larger pool of potential migrants. At the same time, labor market
conditions in Europe were becoming increasingly unfavorable for many people, as declining
agricultural wages and rising unemployment made it difficult for them to make a living.
In terms of transportation, the authors highlight the improvement of transportation
technologies and the decline in transportation costs, which made it easier and cheaper for
people to travel from Europe to other regions of the world. This made migration more feasible
for many people and helped to facilitate the large-scale movement of people from Europe to
other parts of the world.
The authors also consider other factors that may have contributed to the migration, including
political and religious reasons. However, they emphasize that the main driving force behind
the migration was economic in nature, as people sought to improve their standard of living
and find better opportunities elsewhere.
In conclusion, the authors argue that the combination of these various factors created a push-
pull effect that encouraged people to leave Europe in search of better opportunities elsewhere.
They note that this mass migration had a profound impact on both Europe and the regions to
which people migrated, leading to significant changes in both the source and destination
countries.
Vicente Pinilla and Agustina Rayes, ‘How Argentina became a super-exporter of
agricultural and food products during the First Globalisation (1880–1929)’
Cliometrica (2019) 13: 443–469.
First wave of globalization and Argentine
- What drove export-led growth in Argentina 1880-1929?
o Within this context, some countries that specialized in the production and
export of primary products, with a high demand from north-west Europe due
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