Working Papers

Public Goods Under Financial Distress [Link]

I study the effect of financial crises on local public good provision using novel archival panel data on U.S. cities and municipal bonds during the 1920s and 1930s. Cities issue debt to fund infrastructure projects and provide important public services to residents. However, when a financial crisis occurs, financially leveraged cities can suffer distress and curtail public spending, which may lead to long-term consequences for urban growth. In this paper, I estimate the effect of financial leverage on spending and investment during the Great Depression, a time of little federal support and intergovernmental transfers. I find that distressed cities significantly lowered public expenditure: roughly 20 percent of the drop in public investment is explained through a reallocation of budgets towards debt repayment. In response, I find suggestive evidence that households subsequently relocated away from distressed cities.

Crises and Intergenerational Mobility [Link]

I study the impact of the Great Depression on the educational attainment and intergenerational education mobility of U.S. males. I collect local data on youth unemployment and school quality during the Depression and study their effect on secondary education. Using Census data on males and their fathers, my difference-in-differences strategy attempts to explain the variation in schooling and mobility across cohorts. I find that worsening labor markets for youth significantly increased the school attendance of youth from poor, but not wealthy, families while public spending cuts decreased it. Overall, I find that the Depression increased intergenerational education mobility.

Correlation in State and Local Tax Changes [Link]

We develop a comprehensive dataset of state and local taxes from 2000-2015 that includes personal income taxes, property taxes, corporate income taxes, sales taxes, estate taxes and excise taxes. We illustrate how state and local taxes have changed over time, in response to business cycles, and to what extent different taxes co-move within a state or locality. Across states and local jurisdictions, large differences in the mix of taxes are observed, and these differences have tended to become more pronounced over time. Moreover, we note that different types of taxes tend to co-move within a state or local jurisdiction, highlighting the importance for researches to take into account the entirety of the tax system, rather than just a single tax type, when examining household or firm responses to state and local tax changes. At both a state and local level, increases in tax rates of all types tend to increase tax revenue but worsen business conditions and employment.

Works in Progress

Lender of Last Resort: Local Financial Constraints and Federal Reserve Policy in the 1930s

Economic recovery from financial crises is typically slower than from other crises, possibly due to credit rationing by financial intermediaries. I study whether lender-of-last-resort policies of the Atlanta Federal Reserve Bank during the Great Depression eased firms’ financial constraints using a novel database of local economic conditions from 1927 to 1937. My identification strategy relies on the willingness of the Federal Reserve to extend credit in some regions and not in others and plausibly exogenous placement of Federal Reserve boundaries. I find evidence that Fed intervention stymied banking panics, but I do not, surprisingly, find any meaningful effect of Fed policies on local economic outcomes.