{"id":107054,"date":"2016-09-18T04:04:55","date_gmt":"2016-09-18T12:04:55","guid":{"rendered":"http:\/\/lukeford.net\/blog\/?p=107054"},"modified":"2016-09-18T04:09:00","modified_gmt":"2016-09-18T12:09:00","slug":"do-immigrants-import-their-economic-destiny","status":"publish","type":"post","link":"https:\/\/lukeford.net\/blog\/?p=107054","title":{"rendered":"Do Immigrants Import Their Economic Destiny?"},"content":{"rendered":"<p><A HREF=\"http:\/\/evonomics.com\/do-immigrants-import-their-economic-destiny-garrett-jones\/\">By Garett Jones<\/a><\/p>\n<p>Why do some countries have relatively liberal, pro-market institutions while others are plagued by corruption, statism, and incompetence? Three lines of research point the way to a substantial answer:<\/p>\n<ul>\n<li>The Deep Roots literature on how ancestry predicts modern economic development,<\/li>\n<li>The Attitude Migration literature, which shows that migrants tend to bring a lot of their worldview with them when they move from one country to another,<\/li>\n<li>The New Voters-New Policies literature, which shows that expanding the franchise to new voters really does change the nature of government.<\/li>\n<\/ul>\n<p>Together, these three data-driven literatures suggest that if you want to predict how a nation\u2019s economic rules and norms are likely to change over the next few decades, you\u2019ll want to keep an eye on where that country\u2019s recent immigrants hail from.<\/p>\n<p><strong>The Deep Roots of Prosperity<\/strong><\/p>\n<p>A glance at the map tells much of the tale: Today\u2019s rich countries tend to be in East Asia, Northern and Western Europe, or are heavily populated by people who came from those two regions. The major exceptions are oil-rich countries. East Asia and Northwest Europe are precisely the areas of the world that made the biggest technological advances over the past few hundred years. These two regions experienced \u201ccivilization,\u201d an ill-defined but unmistakable combination of urban living, elite prosperity, literary culture, and sophisticated technology. Civilization doesn\u2019t mean kindness, it doesn\u2019t mean respect for modern human rights: It means the frontier of human artistic and technological achievement. And over the extremely long run, a good predictor of your nation\u2019s current economic behavior is your nation\u2019s ancestors\u2019 past behavior. Exceptions exist, but so does the rule.<\/p>\n<p>Recently, a small group of economists have found more systematic evidence on how the past predicts the present. Overall, they find that where your nation\u2019s citizens come from matters a lot. From \u201c<a href=\"http:\/\/www.anderson.ucla.edu\/faculty_pages\/romain.wacziarg\/downloads\/roots.pdf\">How deep are the roots of economic development?<\/a>\u201d published in the prestigious <em>Journal of Economic Literature<\/em>:<\/p>\n<blockquote>\n<p>A growing body of new empirical work focuses on the measurement and estimation of the effects of historical variables on contemporary income by explicitly taking into account the ancestral composition of current populations. The evidence suggests that economic development is affected by traits that have been transmitted across generations over the very long run.<\/p>\n<\/blockquote>\n<p>From \u201c<a href=\"http:\/\/www.dartmouth.edu\/~dcomin\/files\/wealth_nations.pdf\">Was the Wealth of Nations determined in 1000 B.C.?<\/a>\u201d (coauthored by the legendary William Easterly):<\/p>\n<blockquote>\n<p>[W]e are measuring the association of the place\u2019s technology today with the technology in 1500 AD of the places from where the ancestors of the current population came from\u2026[W]e strongly confirm\u2026that history of peoples matters more than history of places.<\/p>\n<\/blockquote>\n<p>And finally, from \u201c<a href=\"https:\/\/www.brown.edu\/academics\/economics\/sites\/brown.edu.academics.economics\/files\/uploads\/2008-15_paper.pdf\">Post-1500 Population Flows and the Economic Determinants of Economic Growth and Inequality<\/a>,\u201d published in Harvard\u2019s <em>Quarterly Journal of Economics<\/em>:<\/p>\n<blockquote>\n<p>The positive effect of ancestry-adjusted early development on current income is robust\u2026The most likely explanation for this finding is that people whose ancestors were living in countries that developed earlier (in the sense of implementing agriculture or creating organized states) brought with them some advantage\u2014such as human capital, knowledge, culture, or institutions\u2014that raises the level of income today.<\/p>\n<\/blockquote>\n<p>To sum up some of the key findings of this new empirical literature: There are three major long-run predictors of a nation\u2019s current prosperity, which combine to make up a nation\u2019s SAT score:<\/p>\n<p>S: How long ago the nation\u2019s ancestors lived under an organized <em>state<\/em>.<\/p>\n<p>A: How long ago the nation\u2019s ancestors began to use Neolithic <em>agriculture<\/em> techniques.<\/p>\n<p>T: How much of the world\u2019s available <em>technology<\/em> the nation\u2019s ancestors were using in 1000 B.C., 0 B.C., or 1500 A.D.<\/p>\n<p>On average, nations with high migration-adjusted SAT scores are vastly richer than nations with lower SAT scores: Countries in the top 10% of <a href=\"http:\/\/economix.blogs.nytimes.com\/2010\/08\/02\/was-todays-poverty-determined-in-1000-b-c\/\">migration-adjusted technology<\/a> (T) in 1500 are typically at least 10 times richer than countries in the bottom 10%. If instead you mistakenly tried to predict a country\u2019s income today based on who lived there in 1500, the relationship would only be about one-third that size. The migration adjustment matters crucially: Whether in the New World, across Southeast Asia, or in Southern Africa, one can do a better job predicting today\u2019s prosperity when you keep track of who moved where. It looks like at least in the distant past, migrants shaped today\u2019s prosperity.<\/p>\n<p><strong><em>Do migrants bring their institutions with them? <\/em><\/strong><\/p>\n<p>So migration from high-SAT countries bring the seeds of prosperity: But what exactly are they bringing? As the authors of the <em>Quarterly Journal of Economics<\/em> article speculated, did they bring along a tendency to establish good institutions\u2014the rule of law, low corruption, and competent government? Fortunately, an economist has already checked to see whether SAT-type scores drive good institutions. James T. Ang recently published a truly remarkable paper in the <em>Journal of Development Economics<\/em>, \u201c<a href=\"https:\/\/mpra.ub.uni-muenchen.de\/42199\/3\/HisDEV_and_Institution.pdf\">Institutions and the Long-Run Impact of Early Development<\/a>.\u201d Ang ran a variety of statistical tests to see if ancestry-adjusted SAT-like scores had a strong relationship with good institutions. Overall, Ang\u2019s findings are quite clear:<\/p>\n<blockquote>\n<p>[N]ations that were more developed in the pre-modern era tend to have better institutions today.<\/p>\n<\/blockquote>\n<p>He goes on to note:<\/p>\n<blockquote>\n<p>[M]easures adjusted for the global migration effect perform significantly better than their unadjusted counterparts in explaining the variation in institutions across countries, thus highlighting the fact that migration has played a significant part in shaping current economic performance.<\/p>\n<\/blockquote>\n<p>&#8230;Let\u2019s consider the case of Chinese migration throughout Asia. By the standards of European colonization, Chinese migration post-1500 has been relatively (I emphasize <em>relatively<\/em>) peaceful. The non-Chinese residents of these countries tended to have lower ancestral SAT scores than Chinese residents, so we can ask: did Asian countries with a higher percentage of Chinese-descended migrants end up economically freer? Of course, since this is a question about migration <em>from<\/em> China, China itself should be left out of the analysis. The graph below tells the story. It compares Chinese ancestry data from the Putterman-Weil global migration matrix with the Fraser Economic Freedom of the World Index for Asian countries with substantial numbers of Chinese immigrants:<\/p>\n<p><img decoding=\"async\" class=\"alignnone wp-image-3804 size-full\" src=\"http:\/\/evonomics.com\/wp-content\/uploads\/2016\/09\/Screen-Shot-2016-09-16-at-11.44.58-PM.png\" width=\"1274\" height=\"784\" srcset=\"http:\/\/evonomics.com\/wp-content\/uploads\/2016\/09\/Screen-Shot-2016-09-16-at-11.44.58-PM.png 1274w, http:\/\/evonomics.com\/wp-content\/uploads\/2016\/09\/Screen-Shot-2016-09-16-at-11.44.58-PM-300x185.png 300w, http:\/\/evonomics.com\/wp-content\/uploads\/2016\/09\/Screen-Shot-2016-09-16-at-11.44.58-PM-768x473.png 768w, http:\/\/evonomics.com\/wp-content\/uploads\/2016\/09\/Screen-Shot-2016-09-16-at-11.44.58-PM-1024x630.png 1024w, http:\/\/evonomics.com\/wp-content\/uploads\/2016\/09\/Screen-Shot-2016-09-16-at-11.44.58-PM-150x92.png 150w, http:\/\/evonomics.com\/wp-content\/uploads\/2016\/09\/Screen-Shot-2016-09-16-at-11.44.58-PM-1000x615.png 1000w\" sizes=\"(max-width: 1274px) 100vw, 1274px\" \/><\/p>\n<p>Notes: The x-axis data come from the Putterman-Weil global migration matrix, reflecting post-1500 flows of Chinese migrants to these nations. The y-axis data come from the Fraser Economic Freedom of the World Index. The correlation is 0.9, significant at conventional levels with a sample size of seven. Results are little-changed if the Rauch\/Trinidade Chinese ethnicity measures are used instead of Putterman-Weil. The graph is truncated at three because no nation on earth has an economic freedom score below three.<\/p>\n<p>Overall, the relationship between a nation\u2019s percent population of Chinese descent in 1980 and current economic freedom is strongly positive. Singapore, Hong Kong, and Taiwan, the countries with the largest percentage of post-1500 Chinese immigrants, are the freest. Hong Kong, which had only a few thousand Chinese residents before the British arrival, is now the economically freest country in the world. Malaysia (a third of whose residents are of Chinese descent) and Thailand (10 percent) are next, and Malaysia is clearly the freer of the two. The remaining countries, Laos and Myanmar, are substantially less economically free than Singapore. Of course, including China in this graph would weaken the relationship, but to repeat: we aren\u2019t interested in ancestry <em>per se<\/em>, but in relatively peaceful migration.<\/p>\n<p>Economists have long known that some of the strongest statistical predictors of long-run national prosperity have been \u201cpercent Confucian\u201d and \u201cpercent Buddhist.\u201d <a href=\"https:\/\/www.ethz.ch\/content\/dam\/ethz\/special-interest\/mtec\/cer-eth\/resource-econ-dam\/documents\/research\/ws-and-conf\/papageorgiou-2007\/salaimartin_doppelhofer_miller_04.pdf\">A famed paper<\/a> coauthored by Xavier Sala-i-Martin demonstrated that conclusively. It\u2019s time for scholars to investigate whether, for most countries, a pro-Confucian migration policy is a good option.<\/p>\n<p><strong>Migrating Attitudes<\/strong><\/p>\n<p>So, how do migrants change the governments in countries they move to? For a partial answer, we can look at the Attitude Migration literature. The simplest approach is to see if the descendants of, say, Italian migrants to America tend to have the same attitudes toward government as Italians living back in Italy. If they do have similar attitudes, then there really is such a thing as \u201cItalian attitudes toward government,\u201d portable and relatively durable around the globe.<\/p>\n<p>Since public opinion surveys are common around the world, this is an easy topic to investigate. One study looks at attitudes toward income redistribution, finding that second-generation immigrants to the U.S. are more likely to favor income redistribution policies if they come from a country where the average citizen today also favors more redistribution. In this case, attitudes migrate, so heavy immigration from pro-redistribution cultures will tend to boost a nation\u2019s number of pro-redistribution citizens decades later. More importantly, the same holds for trusting behavior: A study published in the <em>American Economic Review<\/em>, provocatively entitled \u201c<a href=\"http:\/\/econ.sciences-po.fr\/sites\/default\/files\/file\/yann%20algan\/Inherited%20Trust%20and%20Growth_AER.pdf\">Inherited Trust and Growth<\/a>,\u201d finds that<\/p>\n<blockquote>\n<p>\u2026inherited trust of descendants of US-immigrants is significantly influenced by the country of origin\u2026of their forbears\u2026<\/p>\n<\/blockquote>\n<p>So trusting attitudes migrate. And the link from trust to economic performance is well-accepted at this point: One famous paper, \u201c<a href=\"https:\/\/hec.unil.ch\/docs\/files\/21\/280\/knack_keefer_1997.pdf\">Does Social Capital Have an Economic Payoff<\/a>?\u201d [Answer: Yes] is now routinely cited in economics textbooks. And why do low-trust societies generate worse economic performance? One reason is that low-trust individuals demand more government regulation. In \u201c<a href=\"http:\/\/marginalrevolution.com\/marginalrevolution\/2008\/08\/regulation-and.html\">Regulation and Distrust<\/a>\u201d the authors report:<\/p>\n<blockquote>\n<p>Using the World Values Survey, we show both in a cross-section of countries, and in a sample of individuals from around the world, that distrust fuels support for government control over the economy.<\/p>\n<\/blockquote>\n<p>The authors suggest that this happens because in low-trust societies, people want someone checking up on untrustworthy businesses and individuals, and a strong government is one way to do just that. Together, this literature suggests that migration from low-trust societies will tend to hurt long-run economic performance, partly because low-trust individuals demand more government regulation.<\/p>\n<p>One particular attitude has been well-studied in the migration literature: Strong family ties. This is often known as \u201c<a href=\"https:\/\/www.amazon.com\/Moral-Backward-Society-Edward-Banfield\/dp\/0029015103\">amoral familism<\/a>,\u201d the view that you should help out your family, right or wrong. In comparative anthropology and sociology, it\u2019s well known that cultures strong in amoral familism tend to be places where children live with their parents into adulthood, where corruption is common, and where identity is heavily shaped by one\u2019s extended family. A remarkable handbook chapter by <a href=\"http:\/\/scholar.harvard.edu\/alesina\/publications\/family-ties\">Alesina and Giuliano<\/a> finds that:<\/p>\n<blockquote>\n<p>\u2026on average familistic values are associated with lower political participation and political action. They are also related to a lower level of trust, more emphasis on job security, less desire for innovation and more traditional attitudes toward working women.<\/p>\n<\/blockquote>\n<p>It\u2019s safe to predict that voters and politicians with these traits are unlikely to support much Schumpeterian creative destruction. And, unsurprisingly at this point, amoral familism itself tends to migrate:<\/p>\n<blockquote>\n<p>\u2026family values are quite stable over time and could be among the drivers of institutional differences and level of development across countries: family values inherited by children of immigrants whose forebears arrived in various European countries before 1940 [!] are related to a lower quality of institutions and lower level of development today.<\/p>\n<\/blockquote>\n<p>At this point, it\u2019s clear that attitudes migrate to a substantial degree, and at least in democracies, they\u2019re likely to take those attitudes into the voting booth. There\u2019s an old saying in the migration policy world, a line by Max Frisch: \u201cWe wanted workers, we got people instead.\u201d It looks like that saying needs updating: \u201cWe wanted workers, we got voters instead.\u201d<\/p>\n<p><strong><em>Attitude Convergence: A two-way street<\/em><\/strong><\/p>\n<p>Of course immigrants don\u2019t just become voters: they sometimes become taste-makers, opinion-setters. As immigrants join the culture, they start to shape the culture. That means that immigrants and their descendants may shape political opinions the way they often shape people\u2019s opinion about food: Migrants start eating some of the foods of the country they move to, but at the same time older residents start trying some foods from immigrant cultures. There\u2019s a mutual exchange, and behavior meets somewhere in the middle. As students of migration repeatedly claim, acculturation is a two-way street: America is different because of Italian and Irish migration, and not just because of the food we eat.<\/p>\n<p>To some extent, this point is obvious, but it has far-reaching implications. It means that one important way that immigrants and their descendants will shape a political system isn\u2019t by directly bringing their own attitudes into the voting booth: It\u2019s also by shaping the political attitudes of their fellow citizens. That\u2019s what happens in a melting pot: We all become a little like each other. So if we really are shaped by our neighbors, then we have yet another good reason to choose our neighbors wisely.<\/p>\n<p>This means that the Attitude Migration channel is perhaps only half the story, but it also means that the other part of the story will be harder to detect. If a nation of 100 million has, say, a million migrants from a particular country, it would be hard to pick out the effect of those migrants on \u201cnative\u201d attitudes: the effect of the migrants would be diluted partly because they\u2019re only 1% of the population, and partly because the change in \u201cnative\u201d attitudes will occur slowly over the decades.<\/p>\n<p>So while it\u2019s important to know whether migrants assimilate completely or partially, it\u2019s just as important to know how much do migrants change their fellow citizens. Past researchers have documented two quite separate findings:<\/p>\n<ul>\n<li>Many migrant attitudes persist to their descendants<\/li>\n<li>Migrants and their descendants seem to make their new homes quite a bit like their old homes.<\/li>\n<\/ul>\n<p>The first point need not be the only cause of the second point. There\u2019s a third point suggested by the common-sense claim that we\u2019re all shaped at least a bit by the attitudes of those around us:<\/p>\n<ul>\n<li>Migrants and their descendants tend to influence the attitudes of their new fellow citizens, so that all groups in society become at least a bit more like each other.<\/li>\n<\/ul>\n<p><strong>New Voters = New Policies<\/strong><\/p>\n<p>We\u2019ve seen that in the extremely long run immigrants have dramatically changed the countries they\u2019ve moved to; and in the medium run we\u2019ve seen that immigrants and their children bring home-country attitudes along for the ride. But as I\u2019ve already noted, some critics will argue that perhaps \u201cthis time is different\u201d, and that even if immigrants import their cultural attitudes to their new homes, maybe they\u2019ll leave those views just outside the voting booth. Perhaps, when it comes time to vote, migrants completely conform to their new home countries.<\/p>\n<p>Here\u2019s one way to check this \u201cNew Voters = No Change\u201d theory: Look at times when large groups of individuals were suddenly given the vote, and then check to see if government policies changed within a few years. Even better, only look at large groups of individuals who had been living somewhat peacefully in the nation for decades. Here\u2019s one such case: The women\u2019s suffrage movement across Western civilization. This extension of the franchise has been heavily studied by economists: The <a href=\"http:\/\/www.people.fas.harvard.edu\/~iversen\/PDFfiles\/LottKenny.pdf\">best-known paper<\/a> draws on the fact that different U.S. states extended the vote at different times to create a kind of natural experiment. It turns out that, contrary to the \u201cNew voters = No change\u201d theory, giving the vote to women really did change government in a more progressive, expansionist direction:<\/p>\n<p style=\"text-align: left; padding-left: 30px;\">Suffrage coincided with immediate increases in state government<br \/>\nexpenditures and revenue and more liberal voting patterns<br \/>\nfor federal representatives, and these effects continued growing<br \/>\nover time as more women took advantage of the franchise\u2026On the basis<br \/>\nof these estimates, granting women the right to vote caused expenditures<br \/>\nto rise immediately by 14 percent\u2026by 21 percent after 25 years, and by 28 percent after 45 years.<\/p>\n<p>Women did not quietly, meekly vote for whatever the men around them supported. They had their own minds, and those minds, when empowered by the vote, moved policy in a more progressive direction. And notice that the longer-run effect was twice the immediate effect: Expanding the franchise to a group that favored more government spending indeed increased government spending, but it took decades to see the full effect. In U.S. history, new voters have mattered.<\/p>\n<p>And this is no one-off study: the policy impact of female suffrage has been studied extensively. To <a href=\"https:\/\/www.researchgate.net\/publication\/5154764_Female_voting_power_The_contribution_of_women%27s_suffrage_to_the_growth_of_social_spending_in_Western_Europe_1869-1960\">quote a study<\/a> focused on Europe:<\/p>\n<blockquote>\n<p>Using historical data from six Western European countries for the period 1869-1960, we provide evidence that social spending out of GDP increased by 0.6-1.2% in the short-run as a consequence of women&#8217;s suffrage, while the long-run effect is three to eight times larger.<\/p>\n<\/blockquote>\n<p>Again, the long run effect matters more than the short run effect. New voters, new policies: NVNP.<\/p>\n<p>Which brings us to one last test of the NVNP hypothesis: The increase in voting rights for when poll taxes were eliminated in the United States. Here again, evidence supports NVNP: the University of Chicago\u2019s <em>Journal of Political Economy<\/em> <a href=\"http:\/\/sobelrs.people.cofc.edu\/Readings\/P-10.%20Husted%20-%20Voting%20Franchise%20on%20the%20Size%20of%20Govt.pdf\">reports<\/a> that \u201celiminating poll taxes raised welfare spending by 11 to 20 percent\u201d among other findings, so once again, new voters made important progressive policy change a reality.<\/p>\n<p><strong>How immigrants shape institutions<\/strong><\/p>\n<p>We now have the key pieces of the puzzle:<\/p>\n<ul>\n<li>The Deep Roots literature which shows that in the long run, migration deeply shapes a nation\u2019s level of pro-market institutions, and that a nation\u2019s ancestry-adjusted SAT score (<em>States, Agriculture, Technology<\/em>) is a good predictor of prosperity.<\/li>\n<li>The Attitude Migration literature, which shows that migrants bring a substantial portion of their attitudes toward markets, trust, and social safety nets with them from their home country.<\/li>\n<li>The New Voters = New Policies literature, which shows that governments really <em>do <\/em>change when new voters show up, and that the changes start to show up in just a few years.<\/li>\n<\/ul>\n<p>Government policies don\u2019t radiate from subterranean mineral deposits: they are in large part the product of its voting citizens. And in the long run, new citizens lead to new policies.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Garett Jones Why do some countries have relatively liberal, pro-market institutions while others are plagued by corruption, statism, and incompetence? Three lines of research point the way to a substantial answer: The Deep Roots literature on how ancestry predicts &hellip; <a href=\"https:\/\/lukeford.net\/blog\/?p=107054\">Continue reading <span class=\"meta-nav\">&rarr;<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[161],"tags":[],"class_list":["post-107054","post","type-post","status-publish","format-standard","hentry","category-immigration"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/lukeford.net\/blog\/index.php?rest_route=\/wp\/v2\/posts\/107054","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lukeford.net\/blog\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lukeford.net\/blog\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lukeford.net\/blog\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/lukeford.net\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=107054"}],"version-history":[{"count":4,"href":"https:\/\/lukeford.net\/blog\/index.php?rest_route=\/wp\/v2\/posts\/107054\/revisions"}],"predecessor-version":[{"id":107058,"href":"https:\/\/lukeford.net\/blog\/index.php?rest_route=\/wp\/v2\/posts\/107054\/revisions\/107058"}],"wp:attachment":[{"href":"https:\/\/lukeford.net\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=107054"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lukeford.net\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=107054"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lukeford.net\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=107054"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}