The Dynamics of Relief Spending and the Private Urban Labor Market During the New Deal
AbstractDuring the New Deal the Roosevelt Administration dramatically expanded relief spending to combat extraordinarily high rates of unemployment. We examine the dynamic relationships between relief spending and local private labor markets using a new panel data set of monthly relief, private employment and private earnings for major U.S. cities in the 1930s. Impulse response functions derived from a panel VAR model that controls for time and city fixed effects show that a work relief shock in period t-1 led to a decline in private employment and a rise in private monthly earnings. The finding offers evidence consistent with contemporary employers' complaints that work relief made it more difficult to hire, even though work relief officials followed their stated policies to avoid affecting private labor markets directly. Meanwhile, negative shocks to private employment led to increases in work relief, consistent with Roosevelt's stated goal of using relief to promote relief and recovery.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 13692.
Date of creation: Dec 2007
Date of revision:
Publication status: published as Neumann, Todd C. & Fishback, Price V. & Kantor, Shawn, 2010. "The Dynamics of Relief Spending and the Private Urban Labor Market During the New Deal," The Journal of Economic History, Cambridge University Press, vol. 70(01), pages 195-220, March.
Note: DAE EFG
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Web page: http://www.nber.org
More information through EDIRC
Other versions of this item:
- Neumann, Todd C. & Fishback, Price V. & Kantor, Shawn, 2010. "The Dynamics of Relief Spending and the Private Urban Labor Market During the New Deal," The Journal of Economic History, Cambridge University Press, Cambridge University Press, vol. 70(01), pages 195-220, March.
- N0 - Economic History - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-01-05 (All new papers)
- NEP-LAB-2008-01-05 (Labour Economics)
- NEP-URE-2008-01-05 (Urban & Real Estate Economics)
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Price Fishback, 2010.
"US monetary and fiscal policy in the 1930s,"
Oxford Review of Economic Policy, Oxford University Press,
Oxford University Press, vol. 26(3), pages 385-413, Autumn.
- Alex Klein & Keisuke Otsu, 2013. "Efficiency, Distortions and Factor Utilization during the Interwar Period," Studies in Economics, Department of Economics, University of Kent 1317, Department of Economics, University of Kent.
- Gabriel Chodorow-Reich & Laura Feiveson & Zachary Liscow & William Gui Woolston, 2012. "Does State Fiscal Relief during Recessions Increase Employment? Evidence from the American Recovery and Reinvestment Act," American Economic Journal: Economic Policy, American Economic Association, American Economic Association, vol. 4(3), pages 118-45, August.
- Klein, Alexander & Otsuy, Keisuke, 2013. "Efficiency, Distortions and Factor Utilization during the Interwar Period," CAGE Online Working Paper Series, Competitive Advantage in the Global Economy (CAGE) 147, Competitive Advantage in the Global Economy (CAGE).
- Pascal Michaillat, 2014.
"A Theory of Countercyclical Government Multiplier,"
American Economic Journal: Macroeconomics,
American Economic Association, vol. 6(1), pages 190-217, January.
- Pascal Michaillat, 2012. "A theory of countercyclical government multiplier," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 54277, London School of Economics and Political Science, LSE Library.
- Price V. Fishback, 2012. "Relief During the Great Depression in Australia and America," CEH Discussion Papers 005, Centre for Economic History, Research School of Economics, Australian National University.
- Price V. Fishback & John Joseph Wallis, 2012. "What Was New About the New Deal?," NBER Working Papers 18271, National Bureau of Economic Research, Inc.
- Price V. Fishback & Valentina Kachanovskaya, 2010. "In Search of the Multiplier for Federal Spending in the States During the Great Depression," NBER Working Papers 16561, National Bureau of Economic Research, Inc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.