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The Effect of Immigration on Education  

Giorgio Brunello

Does a higher share of immigrants affect the school performance of both immigrants and natives? Do desegregation policies improve efficiency? The existing evidence suggests that a higher share of immigrants has a negative (and often sizable) effect on the school performance of immigrants and a negative but probably small effect on the performance of natives. When average school performance is considered, this asymmetry generates concave peer effects, a key condition for the efficiency of desegregating policies. The broad message from the empirical literature is that these policies are not only equitable, in that they provide better opportunities to individuals with relatively low parental background, but also efficient.

Article

An Economic History of Australia  

Martin Shanahan

A new world for Europeans and an ancient land for its Indigenous populations, Australia has provided resources that have sustained its inhabitants for millennia. For the past century the nation’s standard of living has been among the world’s highest. This has accompanied the transformation from an economic frontier to a staples-based economy and to a modern, industrial economy over 150 years. Although a fundamentally urban society, it has been the continued use of the country’s natural assets, especially its land, that has underpinned these changes. While reliant on protective barriers in the first half of the 20th century, the country’s ongoing development has always depended on the inflow of overseas capital, an openness to international trade, and an eagerness to receive new people. When these elements have fluctuated so too has Australia’s economy. The sources of capital, trade, and people have changed over time, but a willingness to follow ideas from overseas has persisted. Not every member of society has benefited from development, and long-term inequality has followed the rise, fall, and rise evident in many Organisation for Economic Co-operation and Development (OECD) nations. Although still a leading nation when measured on the Human Development Index, environmental constraints, increased global tensions, and climate change pose challenges for Australian’s living standards that will again require them to transform their economy.

Article

The Economic and Political Effects of Immigration: Evidence from the Age of Mass Migration  

Marco Tabellini

Between 1850 and 1920, during the Age of Mass Migration, more than 30 million Europeans moved to the United States. European immigrants provided an ample supply of cheap labor as well as specific skills and know-how, contributing to American economic growth. These positive effects were not short-lived, but are still evident in the 21st century: areas of the United States that received more European immigrants during the Age of Mass Migration have higher income per capita, a more educated population, and lower poverty rates. Despite its economic benefits, immigration triggered hostile political reactions, which were driven by cultural differences between immigrants and natives, and culminated in the introduction of country-specific quotas. In contrast to the concerns prevailing at the time, European immigrants eventually assimilated. The process was facilitated by the inflow of 1.5 million African Americans who left the rural South to move to northern and western cities between 1915 and 1930. Black in-migration increased the salience of skin color, as opposed to that of religion and nativity, as a defining feature of in- and out-groups of the society. This reduced the perceived distance between native whites and European immigrants, thereby facilitating the integration of the latter. European immigrants also had long-lasting effects on American ideology. Parts of the country that hosted more immigrants during the Age of Mass Migration have a more liberal ideology and stronger preferences for redistribution well into the 21st century. This resulted from the transmission of political ideology from (more left-leaning) immigrants to natives.

Article

Immigration and International Trade  

Katharina Erhardt and Andrea Lassmann

International trade involves the movement of goods across borders, while immigration pertains to the movement of people across national boundaries. These two phenomena are strongly correlated. To some extent, the similarity between barriers to trade and migration explains this correlation, with distance being a crucial factor in both trade and migration. Geographically closer countries tend to engage in both trade and migration because of closer cultural connections. Immigration is itself also an important determinant of trade flows. Migrant networks play a vital role in reducing trade barriers by improving information sharing and facilitating business connections. This, in turn, leads to an increase in both exports and imports between countries. As trade increasingly relies on efficient firm and supplier matching, particularly within global supply chains, the influence of migrant networks becomes more significant. Finally, immigration also drives demand for goods and services from migrants’ home countries. Migrants often maintain strong ties to their home countries and prefer consuming products and services from those regions. This preference fosters increased bilateral trade flows between the home country and the country of immigration. In summary, international trade and immigration are closely linked, and understanding the interplay between international trade and immigration is crucial for comprehending the dynamics of the global economy.

Article

Economic History of Hawai‘i  

Sumner La Croix

Hawai‘i became one of the last two major land areas on the planet to be settled when Polynesians from Tahiti and the Marquesas Islands navigated voyaging canoes to Hawai‘i in the 11th or 12th century. Settlers brought plants and animals needed to start taro farms modeled on those in their homelands and established chiefdoms using traditional norms of behavior and governance institutions from their home societies. Sometime round 1400, Hawaiians lost contact with the outside world and remained isolated for the next 350–400 years. During this period, competing states emerged, ruled by a sharply differentiated elite (ali‘i) and supported by agricultural surpluses sufficient to support religious and artisan specialists and construction of hundreds of monumental temples. Contact with the outside world was reestablished in 1778 and led to major demographic, economic, and political change: Exposure to outside diseases led to a massive decline in the Native Hawaiian population over the next 125 years; integration with global product markets transformed Hawai‘i’s economy; and warfare among competing states led to the emergence of a centralized monarchy after 1795 that incorporated and adapted some Western political institutions. In 1820, Protestant missionaries brought a foreign religion to Hawai‘i, helped develop a Hawaiian alphabet, and established mission schools that brought literacy to much of the population. A two-decade boom (1812–1833) in harvesting and trading sandalwood with American ships overlapped with a 50-year period in which hundreds of Pacific whaling ships visited Hawai‘i annually to hire Hawaiian sailors and purchase provisions and services. Sugar plantations spread from 1835, expanded rapidly during the U.S. Civil War, and fell back with peace in 1865. An 1876 trade treaty with the United States exempted Hawai‘i sugar firms from the high U.S. tariff on sugar, and they responded by expanding production tenfold by 1883, using immigrant labor from China, Portugal, and Japan. Problems with renegotiating the treaty led to a rebellion by a mostly Caucasian militia group in 1886 that culminated in the overthrow of Queen Lili‘uokalani in 1893. The United States annexed Hawai‘i in 1898 and established a colonial “territorial” government that persisted until Hawai‘i was admitted to the U.S. economic and political union in 1959 as its 50th state. Pineapple and sugar industries expanded under protection of U.S. tariffs and with employment of migrant labor from Japan, Europe, Korea, the Philippines, and Puerto Rico. Japan’s attack on Pearl Harbor in 1941 was followed by imposition of martial law and the buildup of a large U.S. military presence. The economy struggled after the war until the introduction of jet plane passenger service in 1958 prompted millions of tourists from the United States, Japan, and other countries to visit Hawai‘i each year. The tourism boom, institutional reforms of statehood, and population growth ignited an economic boom that would continue thru 1990 and modernize the economy. The 1990s saw economic contraction as Hawai‘i adjusted to changes in U.S. tourism and Japanese foreign investment. From 1990, periodic disruptions to tourism caused by recessions, security crises, and global pandemics punctuated otherwise moderate economic growth.