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The Welfare of Children During the Great Depression

  • Price V. Fishback
  • Michael R. Haines
  • Shawn Kantor

This paper examines the impact of New Deal relief programs on demographic outcomes in major U.S. cities during the 1930s. A five-equation structural model is estimated that tests the effect of the relief spending on infant mortality, non-infant mortality, and fertility. For 111 cities for which data on relief spending during the 1930s were available, we collected annual data that matched the relief spending to the demographic variables, socioeconomic descriptions of the cities, and retail sales, which serve as a proxy for the level of economic activity. Relief spending directly lowered infant mortality rates to the degree that changes in relief spending can explain nearly one-third of the decline in infant mortality during the 1930s. Relief spending also raised general fertility rates. Our estimates suggest that the cost of saving an infant life during this period ranged from $2 to 4.5 million dollars (measured in year 2000 dollars). This range is similar to that found in modern studies of the effect of Medicaid and is within the range of market values of human life.

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File URL: http://www.nber.org/papers/w8902.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 8902.

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Date of creation: Apr 2002
Date of revision:
Handle: RePEc:nbr:nberwo:8902
Note: DAE
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  1. David M. Blau, 1999. "The Effect Of Income On Child Development," The Review of Economics and Statistics, MIT Press, vol. 81(2), pages 261-276, May.
  2. Rebecca Blank, 1995. "Teen pregnancy: government programs are not the cause," Feminist Economics, Taylor & Francis Journals, vol. 1(2), pages 47-58.
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