"Convergence in the Age of Mass Migration"
NBER Working Paper No. 4711
Between 1870 and 1913, economic convergence among present OECD members (or even a wider sample of countries) was dramatic, about as dramatic as it has been over the past century and a half. The convergence can be documented in GDP per worker-hour, GDP per capita and in real wages. What were the sources of the convergence? One prime candidate is mass migration. In the absence of quotas, this was a period of open international migration, and the numbers who elected to move were enormous. If international migration is ever to play a role in contributing to convergence, the pre-quota period surely should be it. This paper offers some estimates which suggest that migration could account for very large shares of the convergence in GDP per worker and real wages, though a much smaller share in GDP per capita. One might conclude, therefore, that the interwar cessation of convergence could be partially explained by the imposition of quotas and other barriers to migration. The paper concludes with caution as it enumerates the possible offsets to the mass migration impact which our partial equilibrium analysis ignores, and with the plea that convergence models pay more attention to open-economy forces.
Published: European review of economic history, vol. 1, no.1 (April 1997): 27-63.