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Works in Progress

This project’s objective is to understand the evolution and economic role of life and property insurance companies in the U.S. during the 19th and 20th centuries by creating a new, comprehensive firm-level panel database. To the best of our knowledge, disaggregated information about the insurance industry before 1980 is sparse despite the economic importance of these financial intermediaries in public and private debt markets. We digitize publicly available historical documents from regulatory filings and industry publications between 1880 and 1950 and collect income statements, balance sheets, security-level holdings, and state-level mortgage and real estate investments from all insurance companies conducting business in the state of New York.

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Working Papers

I study the effect of crises on local public good provision using a comprehensive, novel, archival panel data on U.S. cities and municipal bonds during the 1920s and 1930s. Unlike the modern status quo of countercyclical fiscal stimulus, the Great Depression  provides a unique empirical laboratory to study the consequences of fiscal shocks. Cities issued vast amounts of debt to fund infrastructure projects and provide important public services during rapid urbanization in the early 20th century. The financial crisis during the Great Depression, however, quickly put an end to urban growth. I estimate the effect of financial leverage on municipal spending and investment and find a significant impact of pre-crisis debt on municipal austerity. I disentangle finance-driven from demand-driven mechanisms and find strong evidence of a significant negative impact of financial market frictions. Cities that were forced to refinance during the Depression drastically cut public expenditure, especially capital outlays and police services. 

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Between 1910 and 1940, the high school graduation rate in the United States increased five-fold, setting the stage for human capital-led economic growth throughout the 20th century. This study examines the effects of the Great Depression’s surge in youth unemployment on educational attainment during the 1930s, with a focus on gender and socioeconomic disparities. Using data from the 1940 Census and novel city-level unemployment rates, the analysis shows that increased youth unemployment significantly boosted high school and post-secondary completion rates among young males, particularly those from higher socioeconomic backgrounds. In contrast, the effect on females and lower-income youths was negligible. Robustness checks, including pre-trends, migration patterns, local education spending, and New Deal programs, confirm the stability of these findings. Additionally, I find minimal short-term labor market impacts by 1940, with insignificant changes in labor force participation and wages. The results highlight the critical role of household resources in leveraging educational opportunities during the Great Depression and suggest that financial constraints may have prevented disadvantaged groups from benefiting equally from reduced opportunity costs during a crucial period during the High School Movement.

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Empirical research in public economics, including our own, often uses variation in state and local taxes as an empirical laboratory to estimate causal relationships. A key concern is that other taxes might change at the same time. To assess this concern, we develop a dataset of state (1977–2022) and local (2000–2022) tax rates and revenue from personal income, corporate income, property, sales, and excise taxes. This new dataset generates two key results. First, we find that taxes of different types tend to co-move within a jurisdiction: a tax change of one type can more than double the likelihood of a second tax type changing in the same year. Local tax changes also co- move with tax changes enacted by the state they are located in. This positive correlation can upwardly bias elasticity estimates, but only moderately. For example, regressing state economic outcomes on the full set of state tax changes yields elasticities that are about 10–30% smaller than those obtained from using a single tax type in isolation. Second, we document that the mix of taxes across state and local jurisdictions is very different, and that these differences have become more pronounced over time as jurisdictions have increasingly become reliant on the single tax type—sales, personal or corporate income tax—that was most prominent for them in the earliest part of our sample.

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Financial crises often lead to slow economic recovery, possibly due to credit rationing by fi- nancial intermediaries. This study explores the relationship between lender-of-last-resort (LLR) policies, bank failures, and borrower outcomes during the Great Depression, using new archival data from the U.S. Focusing on a unique historical episode of divergent LLR policies across Fed- eral Reserve banks at the beginning of the Depression, I assess the impact of LLR on the banking sector and manufacturing production and employment. While I find strong evidence that these policies bolstered the banking sector, they appear to have had limited downstream impact on firm outcomes at the plant and county levels, despite the manufacturing sector’s strong reliance on bank credit at the time. These results highlight that LLR policies, by themselves, may not suffice for broader economic recovery after a financial crisis.

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Publications

Janas, P. (2023). Financial Crises and Economic Growth: U.S. Cities, Counties, and School Districts during the Great Depression (Summaries of Doctoral Dissertations for the Nevins Prize). The Journal of Economic History, 83(2), 582-586. doi:10.1017/S0022050723000189

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