Immigration and trade: Evidence from the 1920s Quota Acts

During the 1920s, the US implemented a series of migration restrictions, effectively ending mass migration from Europe. We exploit this shock to migration to identify the effect of migration on trade in a Difference-in-Difference model with heterogeneous treatment effects. Our analysis shows that the 1920's quotas lowered US-European migration, especially the migration from Southern and Eastern Europe, with negative effects for US-European trade. We argue that unobserved changes to tariffs after the war are unlikely to drive these results.