Industrial Management

Only available on StudyMode
  • Download(s) : 10
  • Published : March 25, 2013
Open Document
Text Preview
The age of mass migration from Europe to the New World was one of the largest in history. Between 1850 and 1913, the United States absorbed nearly 30 million European immigrants. With the advanced technology that took place during that period, the declining cost of migration together with the rising real income relaxed the financial constraints, which shifted the migrant flow from richer to the poorer. However, beyond these broad macro patterns, we know very little about the characteristics of individuals who chose to leave Europe.

So what is the motivation behind? It’s very important to study extensively about migration during the era. US maintained a nearly open border back then, allowing the study of self-selection and the economic return to migration without the interference from the legal factors. Today’s---not only individual choice, but also of complicated entry rules, obscure the true economic forces.

There are previous literatures on migrant selection and here are the two very basic models. 1) Roy Model, Roy paper discusses the optimizing choices of ‘workers’ selecting between fishing and hunting. The main idea here is that workers have skills in each occupation, but they can only use one or the other. Hence, workers self-select the sector that gives them the highest expected earnings. 2) Borjas’ paper modified the Roy model of occupational choice to generate predictions about the nature of migrant selection. In his framework, migrant selection is determined by the relative return to skill in the sending and destination economies, which means that if the destination country exhibits higher return to skill than the source country, therefore, greater levels of income inequality, migrants will be drawn disproportionately from the top end of its distribution.

Nevertheless, current work on immigrants flow has found only mixed support for his model. For example, one of them shows Mexican migrants to the US are drawn from the middle, rather than the low end, despite the fact that income inequality is higher in Mexico than in the US.

Wegge, only papers that provide individual level evidence on migrant selection in the 19th century. She documents that intermediate selection for the emigration flow leaving Germany in the 1850s and she concludes that the poorest migrants may have lacked the resources necessary to finance their trips.

Based on these previous researches, the authors have predicted that the migration flow might be more negatively selected, which means, the poor part of the European population is more likely to emigrate. First, Wegge’s Germany intermediate-level migrate may be specific to the 1850s when the cost of migration was still high. So, with the lowering cost of migrating, it is expected that later migration to be more negatively selected than the earlier Germans. Second, as an application to the Roy model, Scandinavian countries are much less equal compared with the states. Migrants tend to negatively select themselves if they are in a higher-return-to-skill country. Lastly, at that time, the US offered the opportunity for occupational upgrading over the life cycle.

First, sample population. The paper focuses on the Norwegian migrant to the US, two reasons, first, Norway had one of the highest out-migration rates among European sending countries. Second, Norway has completely digitized their census during the late 19th century, which means we will have access to large samples.

The Evaluation Criterion. One of the main goals is to estimate the economic return to migration and to see whether migrants were selected from the top or bottom of their distribution. How do we measure these outcomes? The outcomes we observe for each individual is an occupation either in the US or in Norway. We assign individuals the mean earnings for their occupation and we refer to this occupation-based earning measure as “earnings” for simplicity. This simplified method is able to measure the return...
tracking img