Defense Spending and Unemployment Rates

John D. Abell

American Journal of Economics and Sociology, 1992, vol. 51, issue 1, 27-42

Abstract: Abstract. Empirical evidence is provided, using vectorautoregressive techniques, that the employment impacts of defense spending are not equally distributed among racial and gender lines and across time. While increases in defense spending were generally found to be associated with increases in each of the unemployment rates, in the 1980s, it was observed that black males were most severely impacted by such spending, while white males were least severely impacted. It is hypothesized that this finding is consistent with a military industrial complex that has become increasingly complex and which focuses more on high tech weapons procurement than on personnel and maintenance concerns. In contrast, non‐defense spending increases were associated with unemployment rate decreases in all categories. However, in terms of the distribution of these “favorable” impacts, white males benefitted the most and black males benefitted the least.

Date: 1992
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