TY  - JOUR
AU  - Neumann,Todd C.
AU  - Fishback,Price V.
AU  - Kantor,Shawn
TI  - The Dynamics of Relief Spending and the Private Urban Labor Market During the New Deal
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 13692
PY  - 2007
Y2  - December 2007
UR  - http://www.nber.org/papers/w13692
L1  - http://www.nber.org/papers/w13692.pdf
N1  - Author contact info:
Todd C. Neumann
University of California, Merced
P.O. Box 2039
Merced, CA 95344
Tel: 209/228-4020
Fax: 209/228-4007
E-Mail: tneumann@ucmerced.edu

Price V. Fishback
Department of Economics
University of Arizona
Tucson, AZ  85721
Tel: 520/621-4421
Fax: 520/621-8450
E-Mail: pfishback@eller.arizona.edu

Shawn E. Kantor
School of Social Sciences, Humanities and Arts
University of California, Merced
5200 N. Lake Road
Merced, CA 95343
Tel: 209-228-2956
Fax: 209-228-4007
E-Mail: skantor@ucmerced.edu
AB  - 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.
ER  -