Social insurance programs and later-life mortality: Evidence from new deal relief spending

Abstract

A growing body of research explores the long-run effects of social programs and welfare spending. However, evidence linking welfare support in early life with longevity is limited. We add to this literature by evaluating the effect of in-utero and early-life exposure to the largest increases in welfare spending in the US history under the New Deal programs. Using Social Security Administration death records linked with the 1940-census and spending data for 115 major cities, we show that the spending is correlated with improvements in old-age longevity. A treatment-on-treated calculation focused on a period when spending rose by approximately 1900 percent finds that a 100 percent rise in municipal spending in the year of birth is associated with roughly 3.5 months higher longevity. We show that these effects are not driven by endogenous selection of births, selective fertility, endogenous migration, and sample selection caused by endogenous data linking. Additional analysis suggests that rises in education and socioeconomic status are likely channels of impact.

Keywords: Historical data; Longevity; Mortality; New deal; Safety net, Social insurance; Welfare spending.

Figure 1-. Changes in Economic Conditions and New Deal Relief Sending during the Great Depression

Figure 2-. Geographic Distribution of Metropolitan Areas that Contain Cities in the Final Sample based on City-Level Relief Spending During 1929–1940

Figure 3-. Density Distribution of Age at Death in Cities at the Top and Bottom Sextiles of Increases in Spending during the Years 1929–1940