Large-Scale Public Hiring, Wages, and Community Outcomes: Evidence from the Works Progress Administration

Abstract

Using discontinuities in the wage schedule of the Works Progress Administration (WPA), I document that higher WPA wages led to greater WPA employment but did not significantly reduce unemployment levels. The estimated impact on private wages is positive but imprecise. Higher WPA wages did not influence the characteristics of WPA employees. However, they led to lower school dropout rates of 15–16-year-old boys in WPA households.