WWII and Since. Before 1941 1939, Poland 1940, low countries, France, etc US, underutilized...
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Transcript of WWII and Since. Before 1941 1939, Poland 1940, low countries, France, etc US, underutilized...
WWII and Since
Before 1941
1939, Poland 1940, low countries, France, etc US, underutilized industrial capacity
Began producing munitions before 1941 Exports, esp. to Britain
Output
High Federal purchase Civil purchase fell Increased production in munitions How did the government allocate the
resources?
Commandeering Tax income and wealth
Income tax Profit 40% of the spending
Borrowing Monetizing the debt
Treasury issued bonds and Fed bought them
Price Control
Office of Price Administration Price ceiling, quantity Problems?
Quality More regulation! 6 page regulation on fruit cakes
Forced upgrades Black market
US economy after WWII
1945-1973 Rapid Growth @ 3% a year 1973-1995 1% 1995-2004 2.5%
Features of Golden Age
Stabilization FDIC Progressive tax rates Unemployment insurance
US leader Free trade (RTA, GATT, etc) Stable Exchange Rate (Bretton Woods) Marshall Plan
Labor relationships Higher education Social safety net Reduced inequality
Until the 70’s Upward social mobility
The Great Migration and the South South: Economic backward Impact of New Deal
Before: low wage economy After: African Americans moved north
What to do? Lure outside investors
Selling of the South
Since the national minimum wage Southern states actively lure industry
Building plant spaces Advertising Tax incentives Loans Research Triangle in NC
Civil Rights Revolution
Discrimination in the workplace Occupation specific
Economic incentives Employers? Were they good? Federal funding Outside capital Textiles: significant discrimination
Education? Endogenous as well!
Economic Impacts
What are the benefits of integration? Efficiency?
Textile employers Others? Education?
Business climate Immigration Black business owners
Revolution in women’s status
Long-term trends Lower fertility Rising labor force participation Higher education level
Contraceptives “endogenous” women’s group supported the
research Divorce rate increases sharply in 80’s
Changes in law (more states allowed unilateral divorce)
Better able to support themselves Many more divorced, expectation and social norm
Labor Force Participation Rate
Female Percentage in College
0
10
20
30
40
50
60
70
1947
1950
1953
1956
1961
1965
1968
1971
1974
1977
1980
1983
1986
1989
1992
1995
1998
2001
2004
Female Percentage
Female Percentage in Professional Schools
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
1953-5
4
1957-5
8
1961-6
2
1964-6
5
1967-6
8
1969-7
0
1971-7
2
1973-7
4
1975-7
6
1977-7
8
1979-8
0
1981-8
2
1983-8
4
1985-8
6
1987-8
8
1989-9
0
1991-9
2
1993-9
4
1995-9
6
1997-9
8
1999-2
000
2001-0
2
2003-0
4
Dentistry
Medicine
Law
Changes after 1970’s
Before: Women were enrolled in college but not many
went to work After
Co-ed Choice of majors Professional school enrollment increased
Social norms and beliefs: women rejected from professional schools because they would not work
Women did not apply in the first place
Inequality
Rise in Inequality
Explanations?
Skilled-biased technical progress Globalization Immigrants Institutional changes
Skilled-biased technical progress College premium went up Why?
Exogenous innovation? New technologies that required more skilled labor,
thus demand for these workers increase So called “skilled-biased” technical progress Could be “endogenous”
Globalization
More international trade U.S. specialize in high-tech industries Raised high-tech wage
Others
Immigrants More unskilled immigrants
Institutional changes Decline of unions Real minimum wage decreased
“flexible” labor market
Tolerance for wage differentials Less regulation than western Europe
US works more Europeans retire early
US works more Longer hours
Inequality and upward mobility, fear of losing job Regulations: US works more because we can!