Racism, Xenophobia or Markets? The Political Economy of Immigration Policy Prior to the Thirties

Contrary to conventional wisdom, the doors did not suddenly slam shut on American immigrants when Congress passed the Emergency Quota Act of May 1921. Rather, the United States started imposing restrictions a half century earlier. Argentina, Australia, Brazil, and Canada enacted similar measures, although the anti-immigration policy drift often took the form of an enormous drop in (or even the disappearance of) large immigrant subsidies. Contrary to conventional wisdom, there wasn't simply one big regime switch around World War I. What explains immigration policy between 1860-1930? This paper identifies the fundamentals that underlay the formation of immigration policy, distinguishes between the impact of these long run fundamentals and short run timing, and clarifies the difference between market and non-market forces. The key bottom line is this: Over the long haul, immigrant countries tried to maintain the relative economic position of unskilled labor, compared with skilled labor, landowner and industrialist. The morals for the present are obvious.