The effects of immigration on agricultural development

We study the effects of immigration during the Age of Mass Migration (1855–1920) on Brazil’s agricultural development in 1920. Instrumenting for a municipality’s immigrant share using the interaction of aggregate immigrant inflows and the expansion of Brazil’s railway network, we find that a greater share of European immigrants in a municipality led to an increase in farm values. The bulk of the effect was the product of more intense cultivation of land. We also find that it is unlikely that immigration slowed Brazil’s structural transformation. Our results imply that immigration into an emerging agricultural economy can contribute substantially to agricultural development.