Household Income and Spending in the United States During the 1918 Influenza Pandemic

Johan Fourie, Stellenbosch University
Johannes Norling, Mount Holyoke College

In 1918 and 1919, 675,000 Americans died of influenza and pneumonia. These deaths were far in excess of normal and were concentrated in the early fall of 1918 through the early spring of 1919. At the same time, the Bureau of Labor Statistics conducted a Cost of Living survey that recorded household income and spending in 99 US cities. We use these survey records to show that household income declined by up to five percent as the pandemic progressed. We decompose wage earnings into weeks worked and weekly wage rate, and find that a decline in the wage rate earned by men explains this decline in earnings. However, women were more likely to work, suggesting a positive labor supply response during the pandemic. Using newly transcribed mortality data, we show that the decline in earnings was largest in cities with the greatest mortality. School closures and other non-pharmaceutical interventions had little relationship with these changes in income. Declines in income translated directly into similar declines in overall household spending, but we find substantial variation by category of spending. Spending on food, clothing, liquor, and other nondurable goods generally declined, while spending on medical services and furniture and other durable goods increased. Although our results are context contingent – in contrast to COVID-19, the 1918 pandemic was more likely to affect individuals in the prime of their life – we explore potential correlates with COVID-19 consumer behavior. Our household-level findings complement other recent, more macroeconomic studies of the immediate consequences of the 1918 pandemic, such as Velde (2020) and Correia et al. (2020), as well as studies of the lessons of 1918 for today, such as Beach et al. (2020) and Arthi and Parman (2021).

No extended abstract or paper available

 Presented in Session 59. The Consequences of Epidemics