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The Economic Effects of Immigration Restriction Policies - Evidence from the Italian Mass Migration to the US

Author

Listed:
  • Davide M. Coluccia
  • Lorenzo Spadavecchia

Abstract

This article studies the impact of immigration restriction policies on technology adoption in sending countries. From 1920 to 1921, the number of Italian immigrants to the United States dropped by 85% after Congress passed the Emergency Quota Act, a severely restrictive immigration law. In a difference-in-differences setting, we exploit variation in exposure across Italian districts to this massive restriction against human mobility. Using novel individual-level data on Italian immigrants to the US and newly digitized historical censuses, we show that this policy substantially hampered technology adoption and capital investment. We interpret this as evidence of directed technical adoption: an increase in the labor supply dampens the incentive for firms to adopt labor-saving technologies. To validate this mechanism, we show that more exposed districts display a sizable increase in overall population and employment in manufacturing. We provide evidence that “missing migrants,” whose migration was inhibited by the Act, drive this result.

Suggested Citation

  • Davide M. Coluccia & Lorenzo Spadavecchia, 2021. "The Economic Effects of Immigration Restriction Policies - Evidence from the Italian Mass Migration to the US," CESifo Working Paper Series 9361, CESifo.
    • Handle: RePEc:ces:ceswps:_9361
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    File URL: https://www.cesifo.org/DocDL/cesifo1_wp9361.pdf
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    Cited by:

    1. Agostina Brinatti & Xing Guo, 2023. "Third-Country Effects of U.S. Immigration Policy," Staff Working Papers 23-60, Bank of Canada.

    More about this item

    Keywords

    age of mass migration; emigration; economic development; immigration barriers; technology adoption;
    All these keywords.

    JEL classification:

    • N14 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: 1913-
    • N34 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Europe: 1913-
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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