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International migration with capital constraints: interpreting migration from the Netherlands to Canada in the 1920s

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  • Alex Armstrong
  • Frank D. Lewis

Abstract

An inability to borrow affected migration from Europe to North America. This capital constraint is formalized with a life‐cycle model, where agents jointly choose how much to save, the optimal period to finance migration, and whether to migrate. Using a life‐cycle model we show that preference for the home country, the period of adjustment after arrival, and the direct cost of migration affect the savings of migrants, age at migration, and who migrates. These results are discussed in light of wages in Canada and the Netherlands, and the characteristics of Dutch immigrants drawn from ship passenger manifests. Capital constraints delayed migration and help explain the large wage gap between the Netherlands and Canada. JEL classification: J61, N32, N34 Une incapacitéà emprunter a affecté la migration de l’Europe vers l’Amérique du Nord. Cette contrainte sur l’accès au capital est formalisée à l’aide d’un modèle de cycle de vie où les agents choisissent conjointement combien épargner, la période optimale pour financer la migration, et le choix de migrer ou non. A l’aide d’un modèle de cycle de vie, on montre que la préférence pour le pays d’origine, la période d’ajustement après l’arrivée, et le coût direct de la migration affectent l’épargne des émigrants, l’âge auquel ils migrent, et qui émigre. Ces résultats sont discutés à la lumière des salaires au Canada et au Pays‐Bas, et des caractéristiques des immigrants hollandais tirées de listes de passagers de bateaux. Les contraintes sur l’accès au capital ont retardé la migration et aident à expliquer le grand écart entre les salaires en Hollande et au Canada.

Suggested Citation

  • Alex Armstrong & Frank D. Lewis, 2012. "International migration with capital constraints: interpreting migration from the Netherlands to Canada in the 1920s," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 45(2), pages 732-754, May.
    • Handle: RePEc:wly:canjec:v:45:y:2012:i:2:p:732-754
    DOI: 10.1111/j.1540-5982.2012.01714.x
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    1. Dalmazzo, Alberto & de Blasio, Guido & Poy, Samuele, 2018. "Local secessions, homophily, and growth. A model with some evidence from the regions of Abruzzo and Molise (Italy, 1963)," Journal of Economic Behavior & Organization, Elsevier, vol. 151(C), pages 284-306.
    2. Alex Armstrong & Frank D. Lewis, 2017. "Transatlantic wage gaps and the migration decision: Europe–Canada in the 1920s," Cliometrica, Journal of Historical Economics and Econometric History, Association Française de Cliométrie (AFC), vol. 11(2), pages 153-182, May.
    3. Kris Inwood & Chris Minns & Fraser Summerfield, 2016. "Reverse assimilation? Immigrants in the Canadian labour market during the Great Depression," European Review of Economic History, European Historical Economics Society, vol. 20(3), pages 299-321.
    4. Zachary Ward, 2015. "The U-Shaped Self-Selection of Return Migrants," CEH Discussion Papers 035, Centre for Economic History, Research School of Economics, Australian National University.
    5. Gillian C. Hamilton & Ian Keay & Frank D. Lewis, 2017. "Contributions to Canadian economic history: The last 30 years," Canadian Journal of Economics, Canadian Economics Association, vol. 50(5), pages 1632-1657, December.
    6. Sichko, Christopher, 2024. "Migrant selection and sorting during the Great American Drought," World Development, Elsevier, vol. 181(C).
    7. Clemens, Michael A. & Montenegro, Claudio & Pritchett, Lant, 2016. "Bounding the Price Equivalent of Migration Barriers," IZA Discussion Papers 9789, IZA Network @ LISER.
    8. Sichko, Christopher, 2021. "Migrant Selection and Sorting during the Great American Drought," SocArXiv wm2p3, Center for Open Science.

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    More about this item

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • N32 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - U.S.; Canada: 1913-
    • N34 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Europe: 1913-

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