Discrimination, Migration, and Economic Outcomes: Evidence from World War I

61 Pages Posted: 6 Apr 2020 Last revised: 6 Feb 2021

See all articles by Andreas Ferrara

Andreas Ferrara

University of Pittsburgh - Katz Graduate School of Business - Economics Group

Price V. Fishback

University of Arizona; National Bureau of Economic Research (NBER)

Date Written: April 2020

Abstract

Are the costs of discrimination mainly borne by the targeted group or by society? This paper examines both individual and aggregate costs of ethnic discrimination. Studying Germans living in the U.S. during World War I, an event that abruptly downgraded their previously high social standing, we propose a novel measure of local anti-German sentiment based on war casualties. We show that Germans disproportionally fled counties with high casualty rates and that those counties saw more anti-German slurs reported in newspapers. German movers had worse occupational outcomes after the war but also the discriminating communities paid a substantial cost. Counties with larger outflows of Germans, who pre-war tended to be well-trained manufacturing workers, saw a drop in average annual manufacturing wages of 1-7% which persisted until 1940. Thus, for discriminating communities, a few years of intense anti-German sentiment were reflected in worse economic outcomes that lasted for more than a decade.

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Suggested Citation

Ferrara, Andreas and Fishback, Price V., Discrimination, Migration, and Economic Outcomes: Evidence from World War I (April 2020). NBER Working Paper No. w26936, Available at SSRN: https://ssrn.com/abstract=3569401

Andreas Ferrara (Contact Author)

University of Pittsburgh - Katz Graduate School of Business - Economics Group ( email )

United States

Price V. Fishback

University of Arizona ( email )

Tucson, AZ 85721-0108
United States
520-621-4421 (Phone)
520-621-8450 (Fax)

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
United States

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