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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. 


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. In this paper, I study the contribution of the Great Depression to this structural shift, and investigate the impact of the crisis on schooling choices for households across the socioeconomic spectrum. I use novel local labor market data to study the effect on secondary education, occupation choice, and wages. Using brothers, I attempt to explain within-household variation in schooling across Depression severity. I find that the crisis created two sets of winners: those from blue-collar households who were making their secondary-school choice at the very start of the Depression, and those from white-collared households who were making that same choice but after the Depression was well under way. These men entered, and stayed in, secondary schools when their labor market opportunity cost shrank but not when their household con- staints were binding. The return to education for these groups was high: by 1940, they attained more schooling, worked in more prestigious occupations, and obtained higher wages.


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, over business cycles, and to what extent different taxes co- move within a state or county. We document large differences in the mix of taxes across states and local jurisdictions and note that these differences have become more pronounced over time. Political ideology has strong predictive power over changes in tax rates, and these effects vary substantially across tax types. More- over, we find that taxes of different types tend to co-move within a jurisdiction, highlighting the importance for researchers to take into account the entirety of the tax system, rather than just a single tax type, when examining responses to tax changes.


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.



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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