Migration, Population Composition and Long Run Economic Development: Evidence from Settlements in the Pampas
68 Pages Posted: 24 Mar 2018
Date Written: December 2016
This paper analyses the impact of population composition on long run economic development, by studying European migration to Argentina during the Age of Mass Migration (1850-1914). I use an instrumental variables (IV) approach that assigns immigrants to counties by interacting two sources of variation: the availability of land for settlement and the arrival of Europeans over time. Counties with historically higher shares of European population in 1914 have higher per-capita GDP 80 years later. I show that this long run effect is linked to the higher level of human capital that immigrants brought to Argentina. I show that Europeans raised literacy rates in the receiving counties, and that high-skilled Europeans played an important role in the onset of industrialization, owned most of the industrial establishments, and provided the majority of the industrial labour force.
Keywords: Economic Growth and Development, Human Capital, Literacy, Industrialization, Migration
JEL Classification: O11, O14, O15, O47, N16, N66
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