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 mini-is 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. (c) 2005 Elsevier Inc. All rights reserved.