The effects of immigration on inequality in an agricultural economy: Evidence from Brazil in the Age of Mass Migration

with Andrea Papadia and Ariell Zimran

The majority of the 55 million migrants who left Europe during the Age of Mass Migration (1850-1920) went to the United States. A substantial fraction of this migration flow, however, was directed instead to South America, where it was no less important in shaping the development of the receiving countries than it was in the United States. While immigrants to the United States—particularly in the later decades of the Age of Mass Migration—found themselves in an economy that was rapidly industrialized, those who chose Latin America as their new home found themselves in a substantially more agricultural setting. Yet, the effects of their arrival are not understood nearly as well as in the American case. 

In this paper, we study the impact of European mass immigration on the Brazilian agricultural sector in 1920. To do so, we use a newly digitized set of Brazilian census data and an identification strategy based on the interaction of Brazilian railway development and European immigrant inflows. We find that immigration caused an increase in farm value as a result of more intensive cultivation, and had no appreciable impact on inequality. These results complement the broader literature on the effects of immigration by focusing on its effects in the context of a largely agricultural economy.

Diversification of cultivated crops in Brazil by 1921.