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Do Federal Programs Affect Internal Migration? The Impact of New Deal Expenditures on Mobility During the Great Depression

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  • Price V. Fishback
  • William C. Horrace
  • Shawn Kantor

Abstract

** Revised version 2005** Using a recently-uncovered data set that describes over 30 federal New Deal spending, loan, and mortgage insurance programs across all U.S. counties from 1933 to 1939, this paper empirically examines the New Deal's impact on inter-county migration from 1930 to 1940. We construct a net migration measure for each county as the difference between the Census's reported population change from 1930 to 1940 and the natural increase in population (births minus infant deaths minus non-infant deaths) over the same period. Our empirical approach accounts for both the simultaneity between New Deal allocations and migration and the geographic spillovers that likely resulted when spending in one county may have affected the migration decisions of people in neighboring counties. We find that greater spending on relief and public works and a larger value of loans insured by the Federal Housing Administration were all associated with migration into counties where such money was allocated. The FHA's stimulus to the housing industry and large-scale public works projects explain most of the regional variation in migration rates across the country. New Deal loans and agricultural spending to take land out of production had negligible effects on migration patterns.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 8283.

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Date of creation: May 2001
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Handle: RePEc:nbr:nberwo:8283

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  1. Hatton, Timothy J. & Williamson, Jeffrey G., 1998. "The Age of Mass Migration: Causes and Economic Impact," OUP Catalogue, Oxford University Press, number 9780195116519, September.
  2. James R. Hines & Richard H. Thaler, 1995. "The Flypaper Effect," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 217-226, Fall.
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Cited by:
  1. Paulo Reis Mourão., 2005. "La economía y Las uvas de la ira," REVISTA CUADERNOS DE ECONOMÍA, UN - RCE - CID.
  2. Sorensen, Todd & Fishback, Price & Allen, Samuel K. & Kantor, Shawn, 2007. "Migration Creation, Diversion, and Retention: New Deal Grants and Migration: 1935-1940," IZA Discussion Papers 3060, Institute for the Study of Labor (IZA).
  3. Kari Hämäläinen & Petri Böckerman, 2002. "Regional Labour Market Dynamics, Housing and Migration," Discussion Papers 284, Government Institute for Economic Research Finland (VATT).
  4. Price V. Fishback & William C. Horrace & Shawn Kantor, 2001. "The Impact of New Deal Expenditures on Local Economic Activity: An Examination of Retail Sales, 1929-1939," NBER Working Papers 8108, National Bureau of Economic Research, Inc.
  5. 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.
  6. Joshua L. Rosenbloom & William A. Sundstrom, 2003. "The Decline and Rise of Interstate Migration in the United States: Evidence from the IPUMS, 1850-1990," NBER Working Papers 9857, National Bureau of Economic Research, Inc.
  7. Fishback, Price V. & Horrace, William C. & Kantor, Shawn, 2006. "The impact of New Deal expenditures on mobility during the Great Depression," Explorations in Economic History, Elsevier, vol. 43(2), pages 179-222, April.
  8. Price Fishback & Samuel Allen & Jonathan Fox & Brendan Livingston, 2010. "A Patchwork Safety Net: A Survey Of Cliometric Studies Of Income Maintenance Programs In The United States In The First Half Of The Twentieth Century," Journal of Economic Surveys, Wiley Blackwell, vol. 24(5), pages 895-940, December.
  9. Nathan J. Ashby, 2005. "The Effect Of Economic Freedom On Migration Flows Between U.S. States: Is Economic Freedom A Determinant Of Flow Differentials?," Working Papers 05-13 Classification- JEL, Department of Economics, West Virginia University.
  10. Böckerman, Petri & Hämäläinen, Kari, 2002. "Housing, dynamics of regional labour markets and migration," ERSA conference papers ersa02p159, European Regional Science Association.

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