The Effect of Internal Migration on Local Labor Markets: American Cities during the Great Depression

Abstract

The Great Depression offers a unique laboratory to investigate the causal impact of migration on local labor markets. We use variation in the generosity of New Deal programs and extreme weather events to instrument for migrant flows to and from U.S. cities. In-migration had little effect on the hourly earnings of existing residents. Instead, in-migration prompted some residents to move away and others to lose weeks of work or access to relief jobs. For every 10 arrivals, we estimate that 1.9 residents moved out, 2.1 were prevented from finding a relief job, and 1.9 shifted from full-time to part-time work.