Can Transitory Income Shocks Be Made Permanent: The Plight of Farmers in the Us Cotton South 1910-30

Paul Lombardi, San Jose State University

Black men born in the US Cotton South during the early twentieth century earned fifty percent less than their white counterparts. In this paper, I examine how transitory weather based economic fluctuations affect the employment choices of farmers. Using US Census data, I find a negative correlation between wage work and cotton production for black farmers. The employment behavior of white households is unaffected by changes in cotton production. The results are consistent with black farmers using wage work as a coping mechanism in response to declining household incomes. I repeat the analysis using the arrival of the boll weevil as a persistent economic fluctuation and observe labor supply responses reverse—a positive correlation between wage work and cotton production. The results demonstrate the importance of the persistence of economic fluctuations in determining household labor supply responses.

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 Presented in Session 146. Slavery and Its Economic Legacy