Economic arguments play a central role in immigration debates. However, some consequences of migration for the host country are not well studied. In order to assess the benefits from immigration, it is important to study the long-term effect of immigrants on technological progress in the receiving country. In a recent article published in the American Economic Review Erik Hornung analyzes the long-term effects of skilled worker immigration on productivity for the Huguenot migration to Prussia.
The religious flight of French Protestants, the so-called Huguenots, in the seventeenth century is one of the earliest examples of skilled mass migration leading to technological transfers. Identification of technology transfers due to immigration is very difficult with contemporary data since modern means of communication allow for instant spillovers making it difficult to disentangle the various channels through which technological knowledge is transferred. Prior to the Industrial Revolution however, innovation and diffusion almost exclusively occurred due to migration and through face-to-face contact.
After 1685, many Huguenots settled in Brandenburg-Prussia and compensated for population losses due to plagues during the Thirty Years' War. For his econometric studies Hornung combined historical Huguenot immigration lists from 1700 with Prussian firm-level data on the value of inputs and outputs in 1802 in a unique database. He exploits this quasi-natural experiment to show that textile manufactories in towns hosting a higher share of Huguenot refugees in 1700 achieved higher levels of output and employed more technology in 1802. Hornung interprets this result to mean that the immigration of highly skilled Huguenots led to technological diffusion and knowledge transfer between the Huguenots and the natives, which translated into a long-term productivity increase in the textile sector.
Published: American Economic Review, 2014, 104(1), pp. 84-122.