NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Dynamics of Relief Spending and the Private Urban Labor Market During the New Deal

Todd C. Neumann, Price V. Fishback, Shawn Kantor

NBER Working Paper No. 13692
Issued in December 2007
NBER Program(s):   DAE   EFG

During the New Deal the Roosevelt Administration dramatically expanded relief spending to combat extraordinarily high rates of unemployment. We examine the dynamic relationships between relief spending and local private labor markets using a new panel data set of monthly relief, private employment and private earnings for major U.S. cities in the 1930s. Impulse response functions derived from a panel VAR model that controls for time and city fixed effects show that a work relief shock in period t-1 led to a decline in private employment and a rise in private monthly earnings. The finding offers evidence consistent with contemporary employers' complaints that work relief made it more difficult to hire, even though work relief officials followed their stated policies to avoid affecting private labor markets directly. Meanwhile, negative shocks to private employment led to increases in work relief, consistent with Roosevelt's stated goal of using relief to promote relief and recovery.

download in pdf format
   (5273 K)

email paper

This paper is available as PDF (5273 K) or via email.

This paper was revised on September 25, 2009

Acknowledgments

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w13692

Published: Neumann, Todd C. & Fishback, Price V. & Kantor, Shawn, 2010. "The Dynamics of Relief Spending and the Private Urban Labor Market During the New Deal," The Journal of Economic History, Cambridge University Press, vol. 70(01), pages 195-220, March.

Users who downloaded this paper also downloaded these:
Fishback, Kantor, and Wallis w8903 Can the New Deal's Three R's Be Rehabilitated? A Program-by-Program, County-by-County Analysis
Wallis, Fishback, and Kantor w11080 Politics, Relief, and Reform: The Transformation of America's Social Welfare System during the New Deal
Fishback, Horrace, and Kantor w8108 The Impact of New Deal Expenditures on Local Economic Activity: An Examination of Retail Sales, 1929-1939
 
Publications
Activities
Meetings
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us