This article examines the long-term effect of temporary but restrictive migration barriers on regional development in the wake of a refugee crisis by exploiting the large-scale expulsions of Germans after World War II (WW2). Approximately 8 million expellees arrived in West Germany in the late 1940s. Migration restrictions prohibited expelled Germans from settling in the French occupation zone, but there weren’t any similar restrictions on settlement in the American, British or Soviet occupation zones. Migration restrictions were abolished in 1949 when the Federal Republic of Germany (FRG) was founded, following which expellees could move freely across all West German regions.
The analysis is based on German census data from 1925 and 1939 (pre-treatment) and 1946, 1950, 1961, and 1970 (to analyze the treatment effect). Information from 1976 onward is drawn from reports of the German Federal Statistical Office. The data shows that:
- There was a common trend of population growth and population density before 1939.
Regions in the French occupation zone experienced lower population growth and
population density until 1950.
- In December 1949, the unemployment rate in areas of the French occupation zone was much lower than in the other zones. Housing conditions (and war-related
damage) were relatively similar across zones, and rental prices were lower in the French occupation zone. Lower cost of living and lower unemployment should have provided incentives to move to areas of the former French occupation zone once the resettlement restriction was removed.
Using a difference-in-difference approach, the author shows that resettlement restrictions had persistent spatial effects. The results are robust to controlling for several regional
characteristics such as wartime destruction, industry structure and natural conditions and when comparing only regions with similar pre-war conditions based on propensity score matching. In particular:
- Regions that were subject to migration restrictions in the first few years after WW2 have significantly lower levels of population growth and population
density until today. Additionally, the level of urbanization is significantly lower in regions of the former French occupation zone well into 2010, the last year of the observation period.
- There appears to be no convergence of population growth over time. There was a slight catch-up in population levels in areas of the former French occupation zone
in the first years after removing the barrier, which appears to be driven by public resettlement schemes. It is likely that these schemes attracted expellees who were not yet well integrated economically and socially.
- There is some evidence suggesting a detrimental effect of the migration restriction on local income growth in war-devastated regions of the former French occupation zone. Population growth in the other occupation zones is associated with higher income growth, while population growth in the former French occupation zone is to a lower degree related to growth in income levels.
- There was a lower potential for urban population growth and agglomeration economies in war-devastated cities of the former French occupation zone in the first pre-war years. In the 1950s there was large-scale migration of expellees from rural areas into cities which suggests delayed spatial sorting, which had not been possible in the years immediately following WW2 due to wartime destruction. Cities in the former French occupation zone may have attracted fewer expellees
because there were fewer expellees in the surrounding rural areas due to the earlier migration restrictions, and these cities were further from rural counties of the other occupation zones.
The author concludes that the impact of population shocks on the spatial distribution of population depends on the capacity of affected regions to unfold agglomeration
economies. The analysis also indicates that refugees sort into places where they perceive themselves to be more productive after movement restrictions are removed, in particular a
spatial sorting into cities.