Migration, Skills-Biased Technical Change, and Human Capital Accumulation: Evidence From the Great Migration

Abstract

In this paper, I show that the mass migration of relatively skilled workers from a developing region can encourage skill formation in their places of origin. I exploit exogenous variation in South-to-North migration during one of the largest domestic migration events in American history, the Great Migration of four million African Americans (1940-1970). I instrument immigrants’ location decision by relying on pre-existing settlement patterns, which I establish by matching two decades of census records, as well as on exogenous variation in domestic migration induced by World War II. The Great Migration aided in the decline of a backwards agricultural tenancy system, improved Southern black workers’ returns to education, increased the relative proportion of those that held high-skill occupations, and decreased occupational segregation as explained by literacy. Throughout, I provide evidence that these observations are consistent with a canonical model of skills-biased technical change.