Emigration sparked innovation

2022-02-07

The article Mass Migration and Technological Change is soon to be published in The Journal of the European Economic Association
Authors: David Andersson, Mounir Karadja and Erik Prawitz

  • The mass emigration to the United States at the turn of the last century led to innovation and technological development in Sweden.
  • It was emigration that drove technological development and not the other way around, namely that new inventions led to unemployment which thus forced people to emigrate.
  • Increased wage costs led to labour-saving measures that drove technological development.
The graph shows the development of emigration and
patents per capita during the period 1860 to 1914.
The number of patents increased rapidly around the
turn of the century, after the great waves of emigration
during the late 19th century.

New research from Uppsala Immigration Lab examines the economic effects of mass emigration to the United States in the 19th century. About a quarter of Sweden’s population emigrated during a time when the country was relatively poor and technologically undeveloped. Towards the end of the 19th century, however, Sweden experienced an industrial revolution with a high degree of innovation and mechanisation.

To investigate whether emigration had a causal impact on economic development, the researchers compared municipalities in Sweden that had different degrees of emigration between 1867 and 1910. The analysis is based on the fact that emigration was largely due to poor harvests caused by the frost in some parts of the country and the proximity to the ports of emigration in Gothenburg and Malmö.

The researchers find that municipalities with greater emigration had a higher degree of innovation, measured as the number of patents taken by inventors in the municipality. Innovation increased even more in sectors exposed to emigration, and both local and national emigration from a particular sector led to increased innovation. They also find that both the agricultural and industrial sectors became more capital-intensive. One explanation for this may be that emigration increased the wages of those who remained, which created pressure on labour-saving measures and therefore encouraged investment and new inventions.

Finally, the researchers find that areas with greater emigration had a faster transition to the industrial sector and had higher tax revenues, indicating that emigration generally had positive economic effects.

For more information about this research, please contact Mounir Karadja mounir.karadja@nek.uu.se

Last modified: 2021-09-20
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