The New Deal during the 1930s was arguably the largest peace-time expansion in federal government activity in American history. Until recently, there had been very little quantitative testing of the microeconomic impact of the wide variety of New Deal programs. Over the past decade scholars have developed new panel databases for counties, cities, and states and then used panel data methods on them to examine the impact of New Deal spending and lending policies for the major New Deal programs. In most cases, the identification of the effect comes from changes across time within the same geographic location after controlling for national shocks to the economy. Many of the studies also use instrumental variable methods to control for endogeneity. The studies find that public works and relief spending had state income multipliers of around one, increased consumption activity, attracted internal migration, reduced crime rates, and lowered several types of mortality. The farm programs typically aided large farm owners but eliminated opportunities for share croppers, tenants, and farm workers. The Home Owners' Loan Corporation's purchases and refinancing of troubled mortgages staved off drops in housing prices and home ownership rates at relatively low ex post cost to taxpayers. The Reconstruction Finance Corporation's loans to banks and railroads appear to have had little positive impact, although the banks were aided when the RFC took ownership stakes. (JEL D72, E61, L52, N41, N42)

Abstract This paper examines the individual and aggregate costs of ethnic discrimination. Studying Germans in the United States during World War I, an event that abruptly downgraded their previously high social standing, we show that anti-German sentiment was strongly associated with counties’ casualties in the war, leading to subsequent outmigration of Germans. Such relocation to evade discrimination was costly for German workers. However, counties with larger outflows of Germans, who tended to be well-trained manufacturing workers, incurred economic costs too, including a drop in average annual manufacturing wages of 0.6% to 2.2%. This effect lasted at least until 1930.

Before the 1930s Building and Loan Associations (B&Ls) were the leading residential mortgage leaders in the U.S. When severely distressed during the housing crisis of the 1930s, B&Ls frequently took years to liquidate. These delays in resolution resulted from the unique B&L contract that encouraged borrowing members to prolong dissolution and gave them shared control over the timing of liquidation. We estimate a hazard model of dissolution using a new dataset of New Jersey B&Ls and find that the probability of liquidation rose 37% when the share of non-borrowing members rose above two-thirds. The severe restriction on liquidity suffered by non-borrowers was instrumental to the rapid transition from the traditional B&L to the modern Savings & Loan industry during the 1930s housing crisis.

Price V. Fishback, John H. Baskin, Narrowing the Black-White Gap in Child Literacy in 1910: The Roles of School Inputs and Family Inputs, The Review of Economics and Statistics, Vol. 73, No. 4 (Nov., 1991), pp. 725-728

In this article we test whether the introduction of social insurance has led to a reduction in private insurance purchases and precautionary saving by examining the introduction of workers' compensation. Our empirical analysis is based on the financial decisions of over 7,000 households surveyed for the 1917-19 Bureau of Labor Statistics Cost-of-Living study. We find that the presence of workers' compensation at least partially crowded out private accident insurance and led to a substantial reduction in precautionary saving. The introduction of workers' compensation caused private saving to fall by approximately 25 percent, with other factors held constant.

In this article we test whether the introduction of social insurance has led to a reduction in private insurance purchases and precautionary saving by examining the introduction of workers' compensation. Our empirical analysis is based on the financial decisions of over 7,000 households surveyed for the 1917-19 Bureau of Labor Statistics Cost-of-Living study. We find that the presence of workers' compensation at least partially crowded out private accident insurance and led to a substantial reduction in precautionary saving. The introduction of workers' compensation caused private saving to fall by approximately 25 percent, with other factors held constant.

The article examines the impact of New Deal relief programs on infant mortality, non-infant mortality, and general fertility rates in major U.S. cities between 1929 and 1940. Effects are estimated using a variety of specifications and techniques for a panel of 114 cities that reported information on relief spending between 1929 and 1940. The significant rise in relief spending during the New Deal contributed to reductions in infant mortality, suicide rates, and some other causes of death, while contributing to increases in the general fertility rate. Similar to Ruhm's (2000) findings for the modern United States, the article finds that many types of death rates were pro-cyclical during the 1930s. Estimates of the relief costs associated with saving a life (adjusted for inflation) are similar to those found in studies of modern social insurance programs.

The Great Depression offers a unique laboratory to investigate the causal impact of migration on local labor markets. We use variation in the generosity of New Deal programs and extreme weather events to instrument for migrant flows to and from U.S. cities. In-migration had little effect on the hourly earnings of existing residents. Instead, in-migration prompted some residents to move away and others to lose weeks of work or access to relief jobs. For every 10 arrivals, we estimate that 1.9 residents moved out, 2.1 were prevented from finding a relief job, and 1.9 shifted from full-time to part-time work.

Many federal government housing policies began during the New Deal of the 1930s. Many claim that minorities benefitted less from these policies than whites. We estimate the relationships between policies in the 1920s and 1930s and black and white home ownership in farm and nonfarm settings using a pseudo-panel of repeated cross-sections of households in 1920, 1930, and 1940 matched with policy measures in 460 state economic areas. The policies examined include FHA mortgage insurance, HOLC loan refinancing, state mortgage moratoria, farm loan programs, public housing, public works and relief, and payments to farmers to take land out of production.

[Problems with mortgage financing are widely considered to be a major cause of the recent financial meltdown. Several modern programs have been designed to mimic the Home Owners' Loan Corporation (HOLC) of the 1930s. We analyze the impact of the HOLC on the nonfarm rental and owned home markets for over 2,800 counties in the United States in the 1930s. In sparsely populated counties, where financial markets were not as well developed as in larger cities, the HOLC stimulated demand for owned housing more than it influenced supply. In rental markets the HOLC appears to have contributed to an increase in supply.]