Home Sweet Home: The Effect of Sugar Protectionism on Emigration in Italy, 1876-1913

Abstract

Protectionist policies are often considered or even implemented as a reaction to increasing globalization. This is not new in history. This paper uses the introduction of import duties on sugar in the late nineteenth century Italy to measure the impact of protectionism on migration out flows at the time of the fi rst globalization. Both for climate reasons and the nature of the soil, the cultivation and processing of sugar beets was geographically concentrated in a small area, leading de facto to a regional protectionist policy. Our theoretical model illustrates how a tariff that favours local producers may affect residents' incentives to migrate abroad. The predictions of the model are tested with the synthetic control method which uses the variation in sugar cultivation across areas to estimate the effect of interest. Our results show that protectionism effectively reduced the relative incentive to migrate away from sugar-producing areas.