Hard times in the land of plenty: The effect on income and disability later in life for people born during the great depression

Abstract

We use 20th-century data to examine how community economic conditions at the time of birth influenced various measures of socioeconomic success as adults. Our analysis focuses on the worst downturn ever experienced in the United States: the Great Depression. We merge individual information reported by respondents in the U.S. Censuses of 1970 and 1980 with information on state per capita income during the individual's year of birth in their state of birth. Results indicate that the effect of state income per capita in the birth year on income and disability later in life varies with changes in income levels. Individuals born in the trough of the Depression in low-income states had substantially lower incomes and higher work disability rates later in life than workers born in those states in the peak year of 1929. However, the effect of being born during the trough of the Depression in states with higher incomes during the first half of the 20th century was much weaker on income and disability later in life.