From Welfare to Warfare: New Deal Spending and Patriotism During World War II

58 Pages Posted: 26 Mar 2018  

Bruno Caprettini

University of Zurich

Fabio Schmidt-Fischbach

University of Oxford

Hans-Joachim Voth

University of Zurich - UBS International Center of Economics in Society; Centre for Economic Policy Research (CEPR)

Date Written: March 2018

Abstract

Why do people fight for their country? The risks are extreme, the payoff uncertain. In this paper, we argue that reciprocity is a key factor. Examining welfare spending in the US in the 1930s under the New Deal, we show that support for World War II became more common where welfare support had been more generous: war bonds were sold in greater volume, more men and women volunteered, and more soldiers performed heroic actions recognized by a medal. We use weather shocks in the form of droughts to instrument for agricultural emergency relief, and show that results hold. Because both war bond purchases and volunteering respond to welfare support, we argue that results cannot be driven by opportunity cost considerations. Data on World War I patriotic support shows that 1930s emergency spending is only predictive for World War II support. Pre-New Deal droughts are also not correlated with patriotism after 1941.

Keywords: New Deal, volunteering, war bonds, warfare, Welfare state, World War II

Suggested Citation

Caprettini, Bruno and Schmidt-Fischbach, Fabio and Voth, Hans-Joachim, From Welfare to Warfare: New Deal Spending and Patriotism During World War II (March 2018). CEPR Discussion Paper No. DP12807. Available at SSRN: https://ssrn.com/abstract=3149477

Bruno Caprettini (Contact Author)

University of Zurich ( email )

Z├╝rich
Switzerland

Fabio Schmidt-Fischbach

University of Oxford ( email )

South Parks Road
Oxford, OX1 3QZ
United Kingdom

Hans-Joachim Voth

University of Zurich - UBS International Center of Economics in Society ( email )

Raemistrasse 71
Zuerich, 8006
Switzerland

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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