Finance and Growth: Household Savings, Public Investment, and Public Health in Late Nineteenth-Century New Jersey

Howard Bodenhorn

NBER Working Paper No. 23430
Issued in May 2017
NBER Program(s):Development of the American Economy

Saving is essential to the health of economies because it provides the wherewithal for investment. In the late nineteenth century, saving was also essential to the health of urban working-class households. This study brings together information from surveys of household spending and saving, reports of savings banks and insurance companies, water and sewer authorities, and health commissioners to illuminate the connections between household savings and health improvements. Contemporary financial institutions positively influenced economic growth by allocating capital to highly productive employments, including public infrastructure. Specifically, investments in waterworks contributed to the long-run decline in typhoid infection, which improved worker health and productivity.

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Document Object Identifier (DOI): 10.3386/w23430

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