International migration is one of the most pervasive social phenomena of our times. According to recent UN estimates, as of 2017, there were almost 260 million migrants around the world. In the last five decades, the number of foreign born individuals living in the United States has increased more than five-fold, moving from 9 million in 1970 to 50 million in 2017. Not surprisingly, these trends have sparked a heated political debate. Both in Europe and in the US, proposals to introduce or tighten immigration restrictions are becoming increasingly common, and support for populist, right wing parties has been rising steadily.
Two main hypotheses have been proposed to explain anti-immigrant sentiments. The first is economic in nature: the negative effect of immigration on natives’ employment and wages may be the key determinant of political discontent in receiving countries. Although this idea is compelling, and consistent with some studies, evidence suggests that immigrants have a negligible, or even positive, impact on natives’ earnings. The second hypothesis is that backlash is triggered by cultural differences between immigrants and natives. Both today and in the past, politicians highlight the possibility that immigrants’ cultural diversity might represent an obstacle to social cohesion and a menace to the values of hosting communities.
Studying in a unified framework the political and the economic effects of immigration offers an interesting look on how immigration affects communities. It also has one crucial advantage: if one were to observe that immigrants bring economic prosperity without harming any group of native workers, but that they nonetheless trigger political backlash, this would speak in favor of the cultural hypothesis. Between 1850 and 1920, during the Age of Mass Migration, more than 30 million Europeans immigrated to the United States, and the share of foreign born in the US population was even higher than today. Such massive migration, however, was interrupted by two major shocks – World War I and the Immigration Acts (1921 and 1924) – that induced large variation not only in the number but also in the composition of immigrants moving to US in this period.
But in US cities between 1910 and 1930, it appears immigrants raised both employment and occupational mobility among natives. Even native workers employed in occupations heavily exposed to immigrants’ competition, such as manufacturing laborers, did not experience any job or wage losses. These positive economic effects were made possible by two, mutually reinforcing mechanisms. First, firms expanded and increased their investment to take advantage of the supply of cheap, unskilled labor provided by the immigrants. Second, the complementarity between the skills of immigrants and those of natives allowed the latter to get better jobs.
In spite of the positive impact of immigration on native workers, immigrants certainly did cause strong political backlash. First, members of the House representing cities that received more immigrants between 1910 and 1920 were significantly more likely to vote in favor of the 1924 National Origins Act – the bill that eventually shut down European immigration, and regulated the American immigration policy until 1965. It appears that a 5 percentage points increase in immigration was associated with a 10 percentage points higher probability of voting in favor of the National Origins Act. Second, cities cut public goods provision and taxes in response to immigrant arrivals. The reduction in tax revenues was entirely driven by declining tax rates, while the fall in public spending was concentrated on schools and hospitals – two categories of spending where members of the majority group are especially likely to oppose redistribution towards minority groups.
Why did such backlash emerge even if immigrants brought economic prosperity to US cities? It seems natives’ political reactions were increasing in the cultural distance between immigrants and natives, suggesting that backlash had, at least in part, non-economic foundations. The use of religion, in particular, is motivated by the historical evidence that, at that time, nativism often resulted in anti-Semitism and anti-Catholicism. While immigrants from Protestant and non-Protestant countries had similar effects on natives’ employment, they triggered very different political reactions. Only Catholic and Jewish, but not Protestant, immigrants induced cities to limit redistribution, favored the election of more conservative legislators, and increased support for the 1924 National Origins Act.
While such results may be specific to the conditions prevailing in US cities in the early twentieth century they indicate that, when cultural differences between immigrants and natives are large, opposition to immigration can arise even if immigrants are on average economically beneficial and do not create economic losers among natives. Thinking about the current political debate, it’s likely policies aimed at increasing the cultural assimilation of immigrants and at reducing the (actual or perceived) distance between immigrants and natives might be at least as important as those designed to address the economic effects of immigration.