Home, Sweet Home: Returns to Returning in the Age of Mass Migration

Studying migrants from Sweden to the United States, we provide new evidence on return migration during the Age of Mass Migration. Focusing on a sample of migrants and stayers observed in childhood, we document limited effects on income and occupational upgrading, but large effects on wealth. Male returnees held about twice as much wealth as stayers and about 40 percent more than staying brothers. These effects were likely driven by accumulated savings overseas, rather than inheritance or an income premium back home. For female returnees, wealth effects are of similar magnitude, but appear to be realized primarily through marriage

On the Move : Essays on the Economic and Political Development of Sweden

This thesis consists of four self-contained essays in economics. Their abstracts are presented below: Exit, Voice and Political Change: Evidence from Swedish Mass Migration to the United States. We study the political effects of mass emigration to the United States in the 19th century using data from Sweden. To instrument for total emigration over several decades, we exploit severe local frost shocks that sparked an initial wave of emigration, interacted with within-country travel costs. Our estimates show that emigration substantially increased the local demand for political change, as measured by labor movement membership, strike participation and voting. Emigration also led to de facto political change, increasing welfare expenditures as well as the likelihood of adopting more inclusive political institutions. Mass Migration, Cheap Labor, and Innovation. Migration is often depicted as a major problem for struggling developing countries, as they may lose valuable workers and human capital. Yet, its effects on sending regions are ambiguous and depend crucially on local market responses and migrant selection. This paper studies the effects of migration on technological innovation in sending communities during one of the largest migration episodes in human history: the Age of Mass Migration (1850-1913). Using novel historical data on Sweden, where about a quarter of its population migrated, we find that migration caused an increase in technological patents in sending municipalities. To establish causality, we use an instrumental variable design that exploits severe local growing season frost shocks together with within-country travel costs to reach an emigration port. Exploring possible mechanisms, we suggest that increased labor costs, due to low-skilled emigration, induced technological innovation.                                                    On the Right Track: Railroads, Mobility and Innovation During Two Centuries. We study the construction of the 19th-century Swedish railroad network and estimate its effects on innovation during two centuries. To address endogenous placement of the network, our analysis exploits the fact that the main trunk lines were built with the overarching aim to connect particular city centers, while at the same time considering construction costs. Estimates show that innovative activities increased substantially in areas traversed by the railroads. The number of active innovators increased and, moreover, they became more productive. Exploring potential mechanisms, we highlight the importance of knowledge diffusion across space by studying spatial patterns of collaboration between innovators. Our analysis shows that innovators residing in areas connected by the railroad start to collaborate more and over longer distances, especially with other innovators located along the railroad network. Finally, we show that the differences in innovative activities were intensified over the 20th century. Areas traversed by the historical railroads exhibit much higher rates of innovation in the present day.                           Homeownership, Housing Wealth and Socioeconomic Outcomes: Evidence from Sweden 1999-2007. This paper studies a government supported homeownership wave in Sweden, where tenants bought their apartments at prices below the market value in the ownership market. Using detailed administrative register data paired with a difference-in-differences strategy, it compares individuals subject to an ownership transfer to similar individuals who never got the opportunity to buy their homes. After establishing that the new homeowners instantly increased their net wealth, the effects of homeownership and housing wealth on a set of socioeconomic outcomes are measured over time. Although the lump-sum transfer is large, the average individual only modestly adjusts her behavior in terms of labor market participation and demographic decision-making. Studying differences across age, younger tenants increase childbearing and decrease labor income, although modestly. Individuals near their retirement age decrease their labor market participation

Exit, voice and political change: Evidence from Swedish mass migration to the United States

We study the political effects of mass emigration to the United States in the 19th century using data from Sweden. To instrument for total emigration over several decades, we exploit severe local frost shocks that sparked an initial wave of emigration, interacted with within-country travel costs. Our estimates show that emigration substantially increased the local demand for political change, as measured by labor movement membership, strike participation and voting. Emigration also led to de facto political change, increasing welfare expenditures as well as the likelihood of adopting more inclusive political institutions

Collaboration and Connectivity : Historical Evidence from Patent Records

Why has collaboration become increasingly central to technological progress? We document the role of lowered travel costs by combining patent data with the rollout of the Swedish railroad network in the 19th and early-20th century. Inventors that gain access to the network are more likely to produce collaborative patents, which is partly driven by long-distance collaborations with other inventors residing along the emerging railroad network. These results suggest that the declining costs of interacting with others is fundamental to account for the long-term increase in inventive collaboration

Inventors among the "impoverished sophisticate"

This paper examines the identity and origins of Swedish inventors prior to World War I drawing on the universe of patent records linked to census data. We document that the rise of innovation during Sweden's industrialization can largely be attributed to a small industrial elite belonging to the upper-tail of the economic, educational, and social status distribution. Analyzing children's opportunities to become an inventor, we show that inventors were disproportionately drawn from privileged family backgrounds. However, among the middle- and working-class children that managed to overcome the barriers to entry, innovation was a path to upward mobility

Collaboration and connectivity : Historical evidence from patent records

Why has collaboration become increasingly central to technological progress? We document the role of lowered travel costs by combining patent data with the rollout of the Swedish railroad network in the 19th and early -20th century. Inventors that gain access to the network are more likely to produce collaborative patents, which is partly driven by long-distance collaborations with other inventors residing along the emerging railroad network. These results suggest that the declining costs of interacting with others is fundamental to account for the long-term increase in inventive collaboration.The authors contributed equally to the paper</p

A response to Pettersson-Lidbom’s “Exit, Voice and Political Change: Evidence from Swedish Mass Migration to the United States – a Comment”

In a comment to Karadja &amp; Prawitz (2019), henceforth KP, Per Pettersson-Lidbom (2020), henceforth P-L, argues that the main results in KP are severely biased. He argues that KP's results are biased due to non-classical measurement error in emigration and due to confounders related to the instrument. In this response, we show that P-L's reasoning regarding measurement error bias contradicts the results from his proposed test. More generally, P-L's results cannot exclude alternative and arguably more likely explanations. We present two straightforward tests that both indicate that measurement error does not bias KP's results. Second, we argue that KP controls for confounders in a standard way given the identication strategy. Including fixed effects at the level of the exogenous cross-sectional variation, as P-L does, severely limits the available identifying variation and decreases precision. Nevertheless, we document that KP's results are robust to non-linear frost shock controls, including fixed effects for groups of similar frost shocks. In addition, we show that our results are robust to altering regional fixed effects or dropping them altogether, in contrast to what is suggested by P-L.

A response to Pettersson-Lidbom’s “Exit, Voice and Political Change: Evidence from Swedish Mass Migration to the United States – a Comment”

In a comment to Karadja &amp; Prawitz (2019), henceforth KP, Per Pettersson-Lidbom (2020), henceforth P-L, argues that the main results in KP are severely biased. He argues that KP's results are biased due to non-classical measurement error in emigration and due to confounders related to the instrument. In this response, we show that P-L's reasoning regarding measurement error bias contradicts the results from his proposed test. More generally, P-L's results cannot exclude alternative and arguably more likely explanations. We present two straightforward tests that both indicate that measurement error does not bias KP's results. Second, we argue that KP controls for confounders in a standard way given the identication strategy. Including fixed effects at the level of the exogenous cross-sectional variation, as P-L does, severely limits the available identifying variation and decreases precision. Nevertheless, we document that KP's results are robust to non-linear frost shock controls, including fixed effects for groups of similar frost shocks. In addition, we show that our results are robust to altering regional fixed effects or dropping them altogether, in contrast to what is suggested by P-L.

MAKING A MARKET : INFRASTRUCTURE, INTEGRATION, AND THE RISE OF INNOVATION

—We exploit exogenous variation arising from the historical roll-out of the Swedish railroad network across municipalities to identify the impacts of improved transport infrastructure on innovative activity. A network connection led to a local surge in patenting due to an increased entry and productivity of inventors. As the railroad network expanded, inventors in connected areas began to develop ideas with applications outside the local economy, which were subsequently sold to firms along the network. Our findings suggest that reductions in communication and transportation costs were an important driver of the historical emergence of a market for ideas