Does it matter where you came from? Ancestry composition and economic performance of US counties, 1850–2010

What impact on local development do immigrants and their descendants have in the short and long term? The answer depends on the attributes they bring with them, what they pass on to their children, and how they interact with other groups. We develop the first measures of the country-of-ancestry composition and of GDP per worker for US counties from 1850 to 2010. We show that changes in ancestry composition are associated with changes in local economic development. We use the long panel and several instrumental variables strategies in an effort to assess different ancestry groups’ effect on county GDP per worker. Groups from countries with higher economic development, with cultural traits that favor cooperation, and with a long history of a centralized state have a greater positive impact on county GDP per worker. Ancestry diversity is positively related to county GDP per worker, while diversity in origin-country economic development or culture is negatively related.