Advanced Search
MyIDEAS: Login

The New Deal, the GI Bill, and the Post-War Housing

Contents:

Author Info

  • Don Schlagenhauf

    (Florida State University)

  • Carlos Garriga

    (Federal Reserve Bank of St. Louis)

  • Matthew Chambers

    (Towson University)

Abstract

After the collapse of housing markets during the Great Depression, the government played a large role shaping the future of the housing .nance, housing policy in the New Deal, as well as the development of the GI Bill for war veterans that had signi.cant importance for mortgage .nance and education. Soon after, the housing markets witness the largest boom in recent history. The objective in the paper is to quantify the contribution of government intervention in housing markets in the expansion in U.S. home ownership using an equilibrium model of tenure choice. In the model home buyers have access to a menu of mortgage choices to .nance the acquisition of the house. The government also provides special programs, consistent with the provisions of the GI Bill and the tax code. The parameterized model is consistent with key aggregate and distributional features in the U.S. in 1940. The model is capable of accounting for 95 percent of the boom in homeownership. The model suggests that government policies had a non-trivial effect in the housing boom. All these policies has positive effects in the demand for housing by reducing the relative cost. For example, introduction of the mortgage deduction can account for 13 percent of the increase in ownership. The asymmetric treatment of owner-occupied housing also had signi.cant effects in housing demand. The model suggests that 35 percent of ownership in that period can be accounted for this factor. Again, the results are in-line with Rosen and Rosen (1980) that predict 25 percent decline. The general equilibrium effects are important. Ignoring the income and price effects should reduce the incentives to own a home even more. When these adjustments are not available, the model predicts a 45 percent decline (from 63 to 53 percent) in ownership.

Download Info

If 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.
File URL: http://www.economicdynamics.org/meetpapers/2012/paper_1050.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Society for Economic Dynamics in its series 2012 Meeting Papers with number 1050.

as in new window
Length:
Date of creation: 2012
Date of revision:
Handle: RePEc:red:sed012:1050

Contact details of provider:
Postal: Society for Economic Dynamics Christian Zimmermann Economic Research Federal Reserve Bank of St. Louis PO Box 442 St. Louis MO 63166-0442 USA
Fax: 1-314-444-8731
Email:
Web page: http://www.EconomicDynamics.org/society.htm
More information through EDIRC

Related research

Keywords:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Rosen, Harvey S & Rosen, Kenneth T, 1980. "Federal Taxes and Homeownership: Evidence from Time Series," Journal of Political Economy, University of Chicago Press, vol. 88(1), pages 59-75, February.
  2. R. J. Saulnier, 1950. "Scope of Urban Mortgage Lending by Life Insurance Companies," NBER Chapters, in: Urban Mortgage Lending by Life Insurance Companies, pages 1-19 National Bureau of Economic Research, Inc.
  3. Fabrizio Perri & Vincenzo Quadrini, 2002. "The Great Depression in Italy: Trade Restrictions and Real Wage Rigidities," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 5(1), pages 128-151, January.
  4. Harold L. Cole & Lee E. Ohanian, 2001. "New Deal policies and the persistence of the Great Depression: a general equilibrium analysis," Working Papers 597, Federal Reserve Bank of Minneapolis.
  5. J. E. Morton, 1956. "Urban Mortgage Lending: Comparative Markets and Experience," NBER Books, National Bureau of Economic Research, Inc, number mort56-1, October.
  6. Pedro Amaral & James C. MacGee, 2002. "The Great Depression in Canada and the United States: A Neoclassical Perspective," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 5(1), pages 45-72, January.
  7. R. J. Saulnier, 1950. "Introductory pages to "Urban Mortgage Lending by Life Insurance Companies"," NBER Chapters, in: Urban Mortgage Lending by Life Insurance Companies, pages -23--16 National Bureau of Economic Research, Inc.
  8. R. J. Saulnier, 1950. "The Urban Mortgage Market Served by Life Insurance Companies, 1920-46," NBER Chapters, in: Urban Mortgage Lending by Life Insurance Companies, pages 37-57 National Bureau of Economic Research, Inc.
  9. Matthew Chambers & Carlos Garriga & Don E. Schlagenhauf, 2007. "Accounting for changes in the homeownership rate," Working Paper 2007-21, Federal Reserve Bank of Atlanta.
  10. R. J. Saulnier, 1950. "Appendices to "Urban Mortgage Lending by Life Insurance Companies"," NBER Chapters, in: Urban Mortgage Lending by Life Insurance Companies, pages 107-180 National Bureau of Economic Research, Inc.
  11. Raymond J. Saulnier, 1950. "Urban Mortgage Lending by Life Insurance Companies," NBER Books, National Bureau of Economic Research, Inc, number saul50-1, October.
  12. Saul B. Klaman, 1961. "The Postwar Residential Mortgage Market," NBER Books, National Bureau of Economic Research, Inc, number klam61-1, October.
  13. Leo Grebler & David M. Blank & Louis Winnick, 1956. "Capital Formation in Residential Real Estate: Trends and Prospects," NBER Books, National Bureau of Economic Research, Inc, number greb56-1, October.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Matthew Chambers & Carlos Garriga & Don E. Schlagenhauf, 2013. "Did Housing Policies Cause the Postwar Boom in Homeownership?," NBER Chapters, in: Housing and Mortgage Markets in Historical Perspective National Bureau of Economic Research, Inc.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:red:sed012:1050. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christian Zimmermann).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.