Author: Marcos Castillo
Why Did Swedish Immigrants to the U.S. Earn So Much More than Stayers in Sweden?
New evidence on the economic returns to migration during the Age of Mass Migration
Ingress:
During the Age of Mass Migration, over a million Swedes left their homeland in search of better lives in the United States. But how much did they really gain from the move—and why? My research uses newly linked historical census data to provide insight into the true economic returns to migration, with findings that challenge assumptions about occupational mobility and upward social mobility.
Migration and Economic Gain: More Than Just a Better Job?
The Age of Mass Migration, spanning the mid-19th to early 20th centuries, saw over 30 million Europeans cross the Atlantic. Among them were more than a million Swedes, many of whom settled permanently in the U.S. Despite the magnitude of this movement, measuring how much individuals actually benefited economically has long posed challenges—mainly due to data limitations and selection bias.
In my study, I focus on Swedish migrants in 1900 and 1910, using newly digitized and linked individual-level data from Swedish and U.S. censuses. By comparing migrants to their brothers who remained in Sweden, I control for family background and unobserved traits shared between brothers. This allows for a more accurate estimation of the return to migration—both overall and by social class of origin.
I find that Swedish migrants earned, on average, 80 percent more than their brothers in 1900. This return far exceeds those of internal migration in Sweden at the time (about 18%) and is comparable to findings for Norwegians in a similar study (Abramitzky et al. 2012). Importantly, migrants from lower social classes gained the most—some experiencing returns of over 90 percent. However, these returns declined slightly by 1910, reflecting changing economic conditions and real wage convergence between Sweden and the U.S.
Returns to migration by social class of origin. The dashed line represents the average for each census year.
Wages, Not Mobility, Drove the Gains
One of the central questions in migration research is why migrants earn more: is it due to moving into higher-paying occupations or simply earning more for doing similar work? My findings provide strong evidence for the latter. Swedish migrants did not experience substantial occupational upgrading compared to their brothers back home. Most remained in comparable types of work—yet earned significantly more due to the U.S. wage premium.
This challenges the notion that the U.S. labor market offered vastly greater upward mobility to all migrants. Instead, it underscores the powerful role of international wage differentials in shaping migration outcomes. The decision to migrate, particularly for individuals from lower social classes, represented an extraordinary opportunity to dramatically increase earnings—even without changing career paths.
Returns to migration are measured using Swedish occupational earnings. The dashed line marks zero, meaning the migrant’s U.S. occupation paid the same as their brother’s occupation in Sweden.
Contribution to Debates
These findings contribute to ongoing debates in economic history and migration studies about the sources of migrants’ success. While recent work has emphasized occupational mobility as a key factor in long-run assimilation and social advancement, my research suggests that, at least in the short term, wage differentials across countries were the main drivers of economic returns.
Moreover, this study adds to the growing body of literature that uses linked historical data to unpack individual migration decisions. By including both sides of the migration story—the stayers and the movers—it provides a more complete understanding of migration’s returns.
References:
Abramitzky, R., Boustan, L. P., & Eriksson, K. (2012). Europe’s tired, poor, huddled masses: Self-selection and economic outcomes in the age of mass migration. American Economic Review, 102(5), 1832-1856. https://doi.org/10.1257/aer.102.5.1832.
