Job Market Paper

“Loans for the Little Fellow”: Credit, Crisis, and Recovery in the Great Depression.

Credit has large effects on the health of the economy, especially during financial crises — but is this driven by credit supply or credit demand? This paper uses newly-collected data and previously unexplored variation to analyze how credit supply shocks affect economic activity. Specifically, I compare cities in California during the Great Depression based on their pre-crisis exposure to the Bank of America. The Bank of America was the only bank in California large and geographically diversified enough to weather the Great Depression without shutting lending down completely. However, it did not select into better performing cities before the Depression. I find that cities with access to more stable lending from 1929 to 1933 had smaller contractions in economic activity in the same period. While cities with relatively little credit access from 1929 to 1933 did not recover to 1929 levels until 1940, Bank of America-branched cities grew by 25 percent in that period. Confirming the city-level results, there is a credit availability wage premium in individual-level data, even when controlling for workers’ pre-crisis characteristics. These increases in wages are driven by a reallocation towards nontradable employment at the expense of the agricultural sector, indicating credit supply induces structural transformation.



  1.  Old Immigrants, New Niches: Russian Jewish Agricultural Farming Colonies and Native Workers in Southern New Jersey, 1880-1910, with Siobhan O’Keefe. Russell Sage Foundation Journal of the Social Sciences. 2018.
    Abstract: The effect of immigration shocks on native workers in a labor niche remains an open question. We test how workers in the farm and nonfarm sectors were affected by the establishment of Russian Jewish agricultural colonies in southern New Jersey in the late nineteenth century. By following the same individuals across the 1880 and 1910 US censuses, we avoid making assumptions about the substitutability of immigrants and native workers. Russian Jews established themselves as farmers or factory workers with the help of international aid societies. Many native workers increased their occupational standing by transitioning to occupations complementary to agricultural and semi-skilled factory work, the immigrants’ main niches. We see no impact on farmers, likely due to the structure of agricultural markets. We also find a decreased probability of out-migration for natives living near a successful agricultural colony, with occupational upgrading concentrated among stayers.

Works in Progress

  1. Will There Be Extra Credit?: Human Capital Formation and Credit Constraints in the Great Depression, with Zachary Bleemer.
  2. Financial Deepening Versus Credit Booms: A Historical Perspective, with Mathias Drehmann and Mikael Juselius.
  3. Moving On Up: Immigration and Native Occupational Mobility in the United States, 1870-1930, with Rowena Gray, Siobhan O’Keefe, and Zachary Ward.
  4. California, Here We Come: Evidence on Migration and Housing Markets.