Monday, 25 January 2016

A city of trades: Spanish and Italian Immigrants in Late Nineteenth Century Buenos Aires, Argentina

Blanca Sánchez Alonso is professor in 
Economic History at Universidad 
CEU-San PabloMadrid
Buenos Aires at the end of the 19th century was a vibrant city. As a political and commercial hub of Argentina, it was a magnet for immigrants from the Old World with a growing demand for unskilled labour.

A large scholarship has studied immigration to Buenos Aires and to Argentina during the era of mass migration (Moya 1998, Baily 1999).  However, we lack, so far, detailed quantitative knowledge on the impact of these flows on labour market. In particular, we are interested in comparing the relative performance of the native workers vis-à-vis the Italian and Spanish immigrants, the largest two immigrant groups, throughout the era of mass migration in Argentina.

Leticia Arroyo Abad is
assistant professor at Middlebury
College
Buenos Aires in 1895 is an extreme case in immigration; the influx of immigrants was so important that only one-third of the male labour force was of Argentinean origin. In 1895, Buenos Aires had nearly 664,000 inhabitants, more than half were foreigners.

Using a new dataset combining individual level census data and a wide array of skilled and unskilled wages, a new EHES working paper looks at labour market participation, human capital, and wealth to assess the performance of Argentineans, Italians, and Spaniards. By classifying the different occupations according to the 1950 IPUMS classification used for the US census, we are able to analyse the labour market in terms of skill composition and skill return.
Male occupation composition by nationality


The findings point at complex effects of immigration on the urban labour market.  (We restrict our analysis to adult males given the data constraints on female wage data). Native workers enjoyed, on average, higher wages than Italians and Spaniards. The labour market rewarded literacy as we observe higher wages rates in more skilled occupations with a higher share of literate workers. Yet, we do not observe systematic native skill upgrading throughout the skill range. In contrast, one distinctive characteristic of the labour market was the relative concentration in different occupations by nationality. Argentines dominated the higher skilled occupations while the Spaniards concentrated in the retail sector and the Italians in the artisan sector.

Male average wages by occupation and nationality

To explain this distribution, we look at the individual characteristics to find that variation in literacy is not consistent with this clustering. Both Spaniards and Italians enjoyed relatively high literacy rates. Following the migration literature, we explore the role of networks as catalysts for integration in the host economy. Ethnic associations played an important role serving as hubs of information and networking and thus decreasing the costs of integration to the new economy. A comparison between the extent and history of local associations shows that the Italian community had a deeper and long-established network in Buenos Aires.
Literacy by occupational group
Overall, this study contributes to our understanding of the performance of labour markets in the presence of large immigrant flows. Buenos Aires at the end of the 19th century welcomed thousands of immigrants. Between 1887 and 1895, these immigrants explain 70% of the total population growth. In this flexible labour market, immigrant workers found their niche based on their skills and aided by the existing networks. With older and deeper network power, Italians had the first mover advantage, a benefit that allowed them to succeed in their adopted country.

This blog post was written by: Leticia Arroyo Abad and Blanca Sánchez-Alonso, Department of Economics, Middlebury College, Vermont, USA and Blanca Department of Economics, Universidad CEU-San Pablo, Madrid, Spain.

The authors thank Timothy J. Hatton and Javier Silvestre for very useful comments and suggestions. This paper also benefited greatly from discussion in the Economic History Seminar of the Universitat de Barcelona and the XI Conference of the European Historical Economics Society (Pisa).

The working paper can be downloaded here: http://www.ehes.org/EHES_88.pdf

References
Baily, Samuel L. (1999). Immigrants in the Land of Promise: Italians in Buenos Aires and in New York City, 1870 to 1914. Ithaca. New York: Cornell University Press.
Borjas, George J. (2003). “The labor demand curve is downward sloping: Reexamining the impact of immigration on the labor market”. Quarterly Journal of Economics 118, 4, pp. 1335–1374.
Hatton, Timothy J. and Williamson. Jeffrey G. (1998). The Age of Mass Migration. Causes and Economic Impact. New York: Oxford University Press.
Moya, José C. (1998) Cousins and Strangers. Spanish Immigrants in Buenos Aires, 1850-1930. Berkeley: University of California Press.
Ottaviano, Gianmarco  and Giovanni Peri. (2012). "Rethinking the Effect Of Immigration On Wages," Journal of the European Economic Association, 10(1): 152-197.

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