The impact of New Deal expenditures on mobility during the Great Depression

Using county-level data on federal New Deal expenditures on public works and relief and Agricultural Adjustment Administration payments to farmers, this paper empirically examines the New Deal’s impact on inter-county migration from 1930 to 1940. We construct a net-migration measure for each county as the difference between the Census’s reported population change from 1930 to 1940 and the natural increase in population (births minus infant deaths minus non-infant deaths) over the same period. Our empirical approach accounts for both the simultaneity between New Deal allocations and migration and the geographic spillovers that likely resulted when economic activity in one county may have affected the migration decisions of people in neighboring counties. We find that greater spending on relief and public works was associated with significant migration into counties where such money was allocated. The introduction of our modern farm programs under the aegis of the Agricultural Adjustment Administration appears to have contributed to a net out-migration that sped the transition of people out of farming.     

The effect of institutional regime change within the new deal on industrial output and labor markets

Markets during the New Deal operated under a number of different institutional regimes, which were marked by executive orders, the passage of various pieces of legislation, and Supreme Court rulings on their constitutionality. Specifically, we break the New Deal period into the following six regimes: the Hundred Days, the President's Reemployment Agreement, the National Recovery Administration Codes of Fair Competition, the Schechter era, the National Labor Relations Act, and the Fair Labor Standards Act. Under these various regimes industrial markets were subject to different regulations relating to hourly wage rates, hours of work, the nature of competition, and unionization. Vector Autoregressive (VAR) regressions are run using a monthly panel of employment, weekly hours worked, wage rates, prices, and output for 11 major industries. We find that key policy and legal changes were associated with large and statistically significant movements in economic variables. Furthermore, changes in institutional regimes impacted different types of industries unevenly. For example, low-wage industries saw the largest increases in wages, and drops in output, after the mandated wage increases in 1933.     

The New Deal and the origins of the modern American real estate loan contract

The fully amortized mortgage loan contract is an important instance of financial innovation in the U.S. residential mortgage market. We examine the adoption of this contract from the 1880s to the 1930s by building and loan (B&L) associations, the nation's most important institutional home mortgage lenders at the time. A chain of complementary innovations by B&Ls gradually reduced the costs of adopting amortization, supporting moderate use by the 1920s. During the crisis of the 1930s, the poor performance of the traditional B&L loan contract radically increased the benefit of adoption, as borrowers demanded the new contract. The adoption examined here occurred primarily in the conventional loan market because B&Ls, unlike other lenders, generally avoided the use of the new Federal Housing Administration insurance program. The New Deal may have had more impact through new federal savings and loan charters, which incorporated many of the complementary innovations that supported the new form of lending.     

The Impact of Housing Prices on Health in the United States Before,During, and After the Great Recession

We estimate the effects of U.S. Metropolitan Statistical Area housing prices on a variety of health outcomes and health-related behaviors separately for homeowners and tenants. The constructed data set consists of information on individuals from the 2002–2012 Behavioral Risk Factor Surveillance System combined with homeownership data from the March Current Population Survey and housing prices from Freddie Mac. We estimate positive effects on homeowners' mental health when housing prices increase. We also find negative effects on tenants' health and health-related behaviors with increases in housing prices. These estimated contemporaneous effects are concentrated among low-income homeowners and tenants, and the effects for tenants are not persistent in the long run. However, the cumulative effects of an increase in housing prices on obesity become more pronounced for homeowners in the long run, resulting in worse self-reported health.     

Estimating the Aboriginal Population in Early Colonial Australia: The Role of Chickenpox Reconsidered

Noel Butlin radically altered the debate about the pre-colonial Aboriginal population when he provided a set of hypothetical demographic scenarios, which nonetheless were both grounded in economic theory or human ecological considerations and broadly consistent with what we know about the historical record. This research builds on Butlin's legacy by exploring how his scenarios are consistent with both the medical understandings of the infectiousness and mortality of various diseases and the history of settlement. Another contribution from this paper is to highlight the possible role of chickenpox in the Aboriginal depopulation in the early colonial period.     

Sticky Swedes and flexible Finns: manufacturing labour markets in Finland and Sweden during the Great Depression

ABSTRACT

Nominal wage stickiness is a popular explanation for the greatness of the Great Depression. According to the sticky-wage explanation, the slow adjustment of nominal wages raised real wages above the market-clearing level, causing a reduction of output and labour, thus increasing unemployment. Explanations for nominal wage stickiness are usually sought within the labour-market institutions and their changes after the First World War. This paper examines the role of labour-market institutions by comparing manufacturing labour markets in Finland and Sweden. These two countries had quite similar economic structures, trade patterns, and exchange rate policies, but different systems of industrial relations. Results indicate that stronger trade unions and collective bargaining made nominal wages stickier in Sweden, while in Finland, where collective agreements did not exist, unions were weaker, and wage adjustment was more flexible. As a result, real product wages rose in Sweden but fell in Finland. This created in Sweden stronger pressure for reducing labour input than in Finland. Our results show on one hand that labour market institutions clearly influenced the course of the Great Depression, but on the other hand that they alone do not explain the different economic outcomes during the depression and the recovery.     

Fertility decline and the heights of children in Britain, 1886–1938

In this paper we argue that the fertility decline that began around 1880 had substantial positive effects on the health of children, as the quality–quantity trade-off would suggest. We use microdata from a unique survey from 1930s Britain to analyse the relationship at the household level between the standardised heights of children and the number of children in the family. Our results suggest that heights are influenced positively by family income per capita and negatively by the number of children or the degree of crowding in the household. The evidence suggests that family size affected the health of children through its influence on both nutrition and disease. Applying our results to long-term trends, we find that rising household income and falling family size contributed significantly to improving child health between 1886 and 1938. Between 1906 and 1938 these variables account for 40% of the increase in heights, and much of this effect is due to falling family size. We conclude that the fertility decline is a neglected source of the rapid improvement in health in the first half of the twentieth century.     

Inequality and infant and childhood mortality in the United States in the twentieth century

This paper deals with the issue of using infant and childhood mortality as an indicator of inequality. The case is that of the United States in the 20th century. Using microdata from the 1900 and 1910 Integrated Public Use Microsamples (IPUMS), published data from the Birth Registration Area in the 1920s, results from a number of surveys, and the Linked Birth & Infant Death Files from the National Center for Health Statistics for 1991, infant and child mortality can be related to such other variables as occupation of father or mother, education of father or mother, family income, race, ethnicity, and residence. The evidence shows that, although there have been large absolute reductions in the level of infant and child mortality rates and also a reduction in the absolute levels of differences across socioeconomic groups, relative inequality has not diminished over the 20th century.     

Exchange Rates and Economic Recovery in the 1930s: An Extension to Asia

Scholars have found a positive relationship between the magnitude of currency depreciation and the extent of recovery from the Great Depression for Europe and Latin America. The relationship between currency depreciation and economic activity during the Great Depression for Asian economies has not yet been explored. This paper examines this topic using data from 13 Asian economies: China, India, Indonesia, Iran, Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand, Turkey, and Vietnam. We find that Asian economies responded in a similar way to currency depreciation during the Great Depression as did European and Latin American countries.     

The Evolution of Australian Monetary Policy in the 1950s

The 1950s in Australia was a decade of major change in both central banking and the financial system. The changes fed upon one another: financial innovation responded to monetary policy; the authorities adapted their strategy in response. The private banks resisted the harnessing of their balance sheets to policy, and a protracted process of conflict and compromise unfolded. Meanwhile, the growth of non‐bank financial institutions undermined bank‐centred policy. Official controls on bank interest rates opened a space for the new intermediaries. The central bank's attempt to restrain their growth contributed to a credit squeeze at the turn of the 1960s.