Global Migration and the World Economy: Two Centuries of Policy and Performance (review)

This book is a major, pathbreaking piece of scholarship about global migration in recent world history. Building on their earlier work, The Age of Mass Migration: Causes and Economic Impact (New York, 1998), Hatton and Williamson compare global migration in the so-called first era of globalization during the late nineteenth century with global migration today. In addition to being a major scholarly work, the authors seek to apply the insights of history and economics to contemporary debates.

Their arguments are straightforward and backed by solid evidence. Migration, they argue, is the single most effective way to lessen poverty in developing countries. Absent war and political upheaval, it tends to raise the welfare of everyone in the home country. Migrants almost always gain by migrating, but so does the home country through remittances, lower unemployment, and the encouragement to acquire skills. Economic growth in the home country initially increases, rather than decreases, the possible stock of migrants. The truly poor can rarely migrate far. Economic growth enables the poor to travel and usually creates new transportation systems for migrating. Migrants lower wages in host countries and increase inequality. The more skilled the migrant population is, however, the more immigration tends to help the whole economy of the host country.

Globalization does not mean a world without borders. Policies have a huge impact on outcomes. Yet, wages determine where migrants go more than welfare does. Host countries would benefit by enacting policies that select migrants with better skills; thus would they stimulate migration worldwide. Because illegal migrants tend to be unskilled, they often attract hostility and encourage inequality. Unfortunately, because of fears about migration, the level of mass migration needed to lower developing countries' poverty is unlikely to occur.

Hatton and Williamson maintain that the high cost of transportation and various restrictions inhibited mass migration in the world before the nineteenth century. Hence, migration in the Atlantic world was either coerced or subsidized—via slavery, indenture, contract, government policy, or private expense. The fall in transportation costs, peace, and new laissez-faire government policies opened up the floodgates in Europe (31–49). Even in the early nineteenth century, migration began to feed on itself. Earlier migrants helped to support new ones with funds and information—what the authors call the "friends-and-neighbors effect." Emigration from Europe did not fall in proportion to rising incomes as the nineteenth century progressed. A persistence effect created by rising incomes allowing new groups among the poor to migrate, the impact of demographic transitions lagging for a generation, and the "friends-and-neighbors" effect meant that migration continued to be high until the early twentieth century.

Using evidence from the United States, the authors argue that pre-1914 immigrants, controlling for their level of skill, literacy, and savings, did extraordinarily well economically by migrating, even though migrants tended to concentrate in the slowest-growing parts of the economy (95–96). Building on their previous work, Hatton and Williamson show that migration was more responsible than any other single factor—such as trade or investment—for the most extensive convergence of living standards in the Atlantic world before 1914, perhaps the most striking case of convergence in world history (105–121).

The success of migration for the migrants, their home countries, and employers in host countries was matched by the negative reaction to migration by workers in the host countries. New World and Oceanic governments acted to protect unskilled voters because their jobs were most threatened by immigrants (175). The rising tide of immigration restrictions, especially in the United States and the British dominions, represented a backlash against globalization. When migration contracted after World War I, all of the workers in these countries saw their real wages rise during the mid-twentieth century. Falling immigration led to falling inequality (193).

Despite the long break in migration history between 1914 and the 1960s and the vast differences between...