The Impact of Forced Migration on Modern Cities: Evidence from 1930s Crop Failures

We find that a sizable portion of current city-level variation in unionization was set in place during the 1930s, and that this exogenous unionization has a real impact on city-level economic outcomes today. First, we show that the driving factor behind these city-level differences was random, and a result of substantially different rainfall levels during the Dust Bowl. We find that individuals in drought - ridden areas were significantly more likely to migrate to close-by cities. Workers in these cities - facing an influx of rural migrants - then became far more inclined to unionize than those facing less competition for their jobs. Using this rainfall (and the resultant crop failures) in surrounding counties to generate exogenous variation in city migration inflows, we show that random differences in the drought-laden 1930’s rainfall predict migration patterns, and variation in union formation rates that persist through today. These exogenous events explaining a sizable percentage of cross-sectional geographic variation in current unionization challenges explanations of unionization as a necessary response to work-place conditions. Furthermore, and importantly, we show that this exogenous unionization that persists through today predicts variation in key city-level economic outcomes such as level of education, establishment growth, and the presence of high-value industries.

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