NBER Publications by Daniel K. Fetter

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March 2016Government Old-Age Support and Labor Supply: Evidence from the Old Age Assistance Program
with Lee M. Lockwood: w22132
Many major government programs transfer resources to older people and implicitly or explicitly tax their labor. In this paper, we shed new light on the labor supply effects of such programs by investigating the Old Age Assistance Program (OAA), a means-tested and state-administered pension program created by the Social Security Act of 1935. Using newly available Census data on the entire US population in 1940, we exploit the large differences in OAA programs across states to estimate the labor supply effects of OAA. Our estimates imply that OAA reduced the labor force participation rate among men aged 65-74 by 5.7 percentage points, nearly half of its 1930-40 decline. Estimating a structural model of labor supply, we find that the welfare costs to recipients of the high tax rates implicit...
July 2014The Twentieth-Century Increase in U.S. Home Ownership: Facts and Hypotheses
in Housing and Mortgage Markets in Historical Perspective, Eugene N. White, Kenneth Snowden, and Price Fishback, editors
Home ownership rose dramatically in the United States during the mid-20th century. This chapter discusses what is known about the causes of this increase and highlights areas needing more research. Past work has investigated factors such as rising real incomes, individuals leaving home at younger ages, favorable tax treatment for those who owned their own houses, and the rise of the modern mortgage finance system. No single explanation fully accounts for the rise in homeownership on its own, but several of these explanations appear to be quantitatively important, and the chapter discusses ways in which they are interrelated. Also discussed are a number of other contributing factors, such as the expansion of suburban neighborhoods associated with the construction of highways and the exo...
October 2013The Home Front: Rent Control and the Rapid Wartime Increase in Home Ownership
The US home ownership rate rose by 10 percentage points between 1940 and 1945, about half the size of the net change over the 20th century, despite severe restrictions on construction during World War II. I present evidence that wartime rent control -- which covered over 80 percent of the 1940 U.S. rental housing stock -- played an important role in this shift, as suggested by Friedman and Stigler (1946). The empirical test exploits features of the central authority's method of imposing rent control, which generated variation in the size of rent reductions for cities that had seen similar increases in rents prior to control. Greater rent reductions were associated with greater increases in home ownership over the first half of the 1940's. This relationship does not appear to be driven ...
June 2011How Do Mortgage Subsidies Affect Home Ownership? Evidence from the Mid-century GI Bills
The largest 20th-century increase in U.S. home ownership occurred between 1940 and 1960, associated largely with declining age at first ownership. I shed light on the contribution of coincident government mortgage market interventions by examining home loan benefits granted under the World War II and Korean War GI Bills. The impact of veterans' housing benefits on home ownership is positive for young men, and declines with age. Veterans' benefits increased aggregate home ownership rates primarily by shifting purchase earlier in life, explaining 7.4 percent of the overall 1940-60 increase and 25 percent of the increase for affected cohorts. A rough extrapolation suggests that broader changes in mortgage terms may explain 40 percent of the 1940-60 increase.

Published: Daniel K. Fetter, 2013. "How Do Mortgage Subsidies Affect Home Ownership? Evidence from the Mid-century GI Bills," American Economic Journal: Economic Policy, American Economic Association, vol. 5(2), pages 111-47, May. citation courtesy of

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