Immigration, Innovation, and Spatial Economic Development: Theory and Evidence from the Age of Mass Migration

08:30-09:30, Thursday, July 11, 2024

Zoom Meeting: 871 0064 4045
Passcode: IAER

Michael Peters is an Associate Professor of Economics at Yale University, a Faculty Research Fellow of the National Bureau of Economic Research (NBER) and a Research Affiliate at the Centre for Economic Policy Research (CEPR). He received his PhD from the Massachusetts Institute of Technology (MIT) and held an Assistant Professor position at the London School of Economics before joining Yale.

In his research he focuses on economic growth and long-run economic development. He has worked on theories of firm-dynamics, highlighting the role of markups for misallocation, the importance of managerial delegation for firm growth, and the consequences of falling population growth. In his work on growth and economic geography, he analyzed the long-run consequences of large-scale migration, both in post-war Germany and for the US in the 19th century. Finally, he studied the process of structural change, both in the US in the past and for present-day India, emphasizing the consequences on inequality across both people and space.

We study the role of European Immigration on US innovation and growth from1880 and 1920. To measure migrants' role for the innovation process, we link, at the individual level, the Population Census, the universe of patents, and millions of historical immigration records. Using these data, we show that migrants fostered US growth both through the provision of innate innovative skills and by settling in urban innovation hubs. To quantify the importance of international migrants, we construct a new spatial model of economic growth, where innovation relies on the stock of local knowledge and migrants endogenously sort across space. International migration during 1880-1920 increased US income per capita by 5% percent in 1920. Immigrants' innate skills and their choice to settle in urban areas where they could build on existing knowledge contributed equally, each accounting for about 40% of these gains.

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