Almost 60 million Europeans immigrated to the New World during the half century or so prior to World War I. This mass migration was influenced by economic factors and had a major effect on labor markets, say researchers.

In the first half of the 19th century, there was very little mass migration, tariffs were high and the global capital market was underdeveloped.

• But immigration increased due to industrialization in Britain followed by other European countries, and also due to lower tariffs, which promoted international trade.

• Due to increased trade and technological innovations, transport costs declined, with real freight rates falling by 1.5 percent a year between 1840 and 1910.

• And declining infant mortality rates created a glut of young adults -- including the young male adults who made up the overwhelming portion of migrants.

• At first average wage rates between the labor-scarce New World and Europe diverged; but wage rates rapidly converged by World War I.

By 1910, immigration over the previous 40 years accounted for 49 percent of the New World labor force and had reduced the labor force around Europe by 22 percent. These changes in labor supply can explain about 70 percent of the convergence of wages in the late 19th century, say economists.

It was not the poorest from the poor countries who immigrated, say researchers, but those with enough skills and assets to take advantage of the opportunity. Thus there were very low exit rates in poor agrarian countries, rising rates in rapidly industrializing countries and declining rates in mature industrial countries.

But in the late 19th century, migrants tended increasingly to be unskilled laborers. Particularly in richer New World countries, such as the United States, this widened the gap between wages for unskilled workers and skilled workers, and fueled anti-immigration sentiment.

Source: Jeffery G. Williamson, "The Economics of Mass Migrations," NBER Reporter, Summer 1998, National Bureau of Economic Research, 1050 Massachusetts Avenue, Cambridge, Mass. 02138, (617) 868-3900.