Do Relief Programs Compensate For Longevity Losses From Reccesions? Evidence From The Great Depression And The New Deal

Ariadna Jou and Tommy Morgan

Working Papers from University of Chile, Department of Economics

Abstract: This paper examines the short- and long-run effects of the Great Depression and the New Deal on well-being, measured by longevity. We construct a novel dataset that tracks a large sample of individuals alive in 1930 until their deaths, linking them to county-level measures of economic crisis severity and New Deal relief transfers. First, we document the dynamic effects of the Great Depression on survival and longevity, showing that individuals -in particular, young men-living in the most severely affected locations experienced significantly shorter lifespans. Second, we assess whether the New Deal mitigated these adverse effects. To identify its causal impact, we leverage variation in politically driven New Deal spending across counties that were equally affected by the Great Depression. We find that the New Deal increased longevity and more than offset the negative effects of the Depression. In its absence, individuals would have lived, on average, 14 months less. The benefitts were significantly larger for men than for women, with children and young individuals also experiencing greater gains from New Deal relief. These effects appear to be mediated, at least in part, by improvements in income and educational attainment in the 1940s.

Pages: 111 pages
Date: 2025-03
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