World War II was a significant event for the US economy, particularly for postwar economic and social policy. The war years saw dramatic changes in the economy; some fueled by previous trends and others a creation of the war years. Following World War II, leading economics and law journals took up the question of whether the glut of resources left over from the war years would be an obstacle to recovery and growth. More recently, Field (2011) has suggested revisions that place the 1920s and 30s ahead of World War II in terms of technological progress and total factor productivity growth. This research project addresses hitherto unanswered questions about the war years and subsequent allocation (or misallocation) of resources that resulted from mobilization. The first part of the project considers the war's effect on the educational attainment of the school age cohort in the early 1940s and their subsequent labor market outcomes. Earlier research highlighted the GI Bill's positive effect on the educational attainment of veterans, while mobilization's effect on the school age cohort was potentially negative. The second part focuses on the connection between wartime labor market institutions, the surge in postwar internal migration, and the Great Compression. The final part studies the causes of postwar productivity growth in industries that were, in different ways, caught up in the mobilization effort. By studying some of the inputs into the process of economic change and growth, each chapter pushes us toward a better understanding of a bigger question: How did mobilization for World War II affect postwar economic growth?
This dissertation studies the impact of World War II on the development of the American economy after 1940. Scholars have long-debated the economic consequences of the war, particularly with reference to the macroeconomy and often relying on standard measures of aggregate economic performance. The approach in this dissertation is to study the microeconomic implications of mobilization for World War II. Specifically, the three main chapters address the following questions: What were the human capital costs of the manpower mobilization for young women? Did industrial mobilization promote the growth and diversification of manufacturing in the American South? How much did government spending on supply contracts contribute to migration and the change in the structure of wages between 1940 and 1950? The first chapter provides an overview of America’s twentieth century wars and surveys the literature on the impact of World War II. In the second chapter, I find that greater exposure to manpower mobilization decreased young women’s educa- tional attainment initially, with important implications for family formation and labor market performance. From the analysis of the third chapter I conclude that the war led to modest reallocation of manufacturing activity toward high value- added sectors, but the war most likely did not create the modern industrial South. In the final chapter I provide evidence that migration induced by World War II played a role in reshaping the structure of wages during the 1940s. Together, the chapters provide important nuance and revisions to our understanding of World War II.