Collaborative Research: The Macroeconomy, Labor Markets, and Economic Mobility from the Civil War to Today: New High-Quality Data on Local Economic Shocks

Information on local economic activity is crucial to research and policy evaluation. It is an outcome of interest in the analysis of economic growth and inequality, regional development, and a range of national and local policies. This information is also an input to key questions about the behavior and welfare of individuals, cohorts, and firms. Despite their paramount importance, systematic historical data on local economic conditions in the US are extremely limited. This limitation creates challenges in examining the evolution of the US economy during a period that includes geographic expansion, demographic and political realignment, and transformation from a rural, agrarian economy into an urban industrial one. Moreover, it poses challenges in understanding more recent developments in the US economy, since many of these have historical roots, or depend on cumulative or historical exposure to shocks. This project will generate a long-run panel on local economic conditions in the US?one that is comprehensive, high-frequency, spatially-disaggregate, and available consistently over the period 1865-present. The project will further illustrate the research potential of this new dataset and provide the first systematic, high-frequency evidence on local economic conditions in the US prior to the 1970s.

The panel dataset will comprise deposits of all households and firms in each county-year from 1865-present. For the period before 1960, the project will generate new data from the balance sheets of all nationally-chartered banks in the US, and supplement this with information on deposits held by state-chartered banks and other depository institutions. From 1961 to the present, the project will merge newly-collected data with existing information on deposits by county. The project will further explore deposits as a close and reliable proxy for traditional local economic indicators, such as employment or income, for which high-quality historical data are not readily available. An additional dataset will contain the detailed balance sheets of all US depository institutions underlying the county panel. These new datasets will have applications to all fields of economics, as well as across broader social science and policy evaluation spheres. The data will advance knowledge on the evolution of the US economy, fostering an understanding of critical local dynamics that previous data have obscured. By filling a substantial gap in the nation's data infrastructure, this project will contribute to both economic knowledge and policy effectiveness.