Thursday, January 12, 2012

Assuming your own conclusions

The only historical labor statistics I've really worked with are from the 1920-21 depression. I have not read much of the Great Depression literature, but this post suggests that official unemployment statistics did not include CCC or WPA employment (they provide an adjustment in the post)! Does anyone know if this has been adjusted in the literature?

That's absolutely unbelievable. I guess at the time I could see the logic. You didn't want to look like you were gaming the numbers and large non-military public employment was unusual. But these are people getting paid to work on legitimate projects. I'd hate to think the official statistics excluding these jobs are widely used. Does anyone know the situation on that?

This is like Bob Higgs' outrageous decision to just subtract federal spending out of the numbers to determine the end of the depression. Surprise, surprise! When you just decide that growth and jobs that would work against your theory don't count, your theory magically gets supported by the data!

I don't know if this is what's going on with the labor data. Maybe they're just noting an adjustment that is made regularly. If anyone has more information on these things, I'm very interested.


  1. Yeah, they have been. I feel like most scholars use Micheal Darby's adjusted unemployment numbers when talking about the GD:

    The refusal to count government employed workers stems from the same reasoning that gave Kuznets so much trouble with his original NIPA scheme. Higgs has some long ruminations on Kuzntet's problem in his work on WWII. Back then there was just a baseline assumption that the government did not create "real" economic activity.

    If I remember correctly the Darby paper is short and an interesting read.

  2. The originator, as far as I know, of the "let's not count the emergency employed" tactic was Stanley Lebergott, who counts emergency jobs as unemployment. More on that can be found here and especially here. Here is Stanley Lebergott's rationale for counting the workers as unemployed (quoted in Eric Rauchway's post):

    "These estimates for the years prior to 1940 are intended to measure the number of persons who are totally unemployed, having no work at all. For the 1930′s this concept, however, does include one large group of persons who had both work and income from work—those on emergency work. In the United States we are concerned with measuring lack of regular work and do not minimize the total by excluding persons with made work or emergency jobs. This contrasts sharply, for example, with the German practice during the 1930′s when persons in the labor-force camps were classed as employed, and Soviet practice which includes employment in labor camps, if it includes it at all, as employment."

    Eric Rauchway's response begins with this:
    "Did you catch that? People who painted murals for the WPA fall into the same category as internees in Mauthausen or the gulag. So they count as unemployed!"

    Now, until I looked at this again, I thought that Stanley Lebergott was writing for the Historical Statistics of the United States, but I see he actually is writing a totally different work.

    Rauchway cites one 1976 paper that deals with this issue, and here is another.


    Darby, M. R. 1976. “Three-and-a-Half Million U.S. Employees Have Been Mislaid: Or, an Explanation of Unemployment, 1934–1941,” Journal of Political Economy 84.1: 1–16.

    When employment provided by relief work is included in the employment figures, unemployment under Roosevelt came down from 25% to just under 10% by 1937. This is a much better record on unemployment than the official statistics reveal.


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