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Defence Spending and Unemployment Rates: An Empirical Analysis Disaggregated by Race

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  • Abell, John D

Abstract

This analysis brings U.S. time series evidence to bear on the relationship of defense spending and unemployment rates. Results indicate that defense increases during the 1970s were associated with improvements in the overall unemployment rate. However, during the 1980s such increases were associated with a worsening of the unemployment rate. Furthermore, upon disaggregation into black and white unemployment rates, it was found that, in general, whites were helped by defense spending increases while blacks were hurt. This evidence offers support for the claim that an increasing complex military production process will lead to diminished employment gains, particularly for minorities who are not proportionately represented in the high-tech industries that serve the military. Copyright 1990 by Oxford University Press.

Suggested Citation

  • Abell, John D, 1990. "Defence Spending and Unemployment Rates: An Empirical Analysis Disaggregated by Race," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 14(4), pages 405-419, December.
    • Handle: RePEc:oup:cambje:v:14:y:1990:i:4:p:405-19
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    Cited by:

    1. Caruso Raul & Antonella Biscione, 2022. "Militarization and Income Inequality in European Countries (2000–2017)," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 28(3), pages 267-285, September.
    2. Julide Yildirim & Selami Sezgin, 2003. "Military expenditure and employment in Turkey," Defence and Peace Economics, Taylor & Francis Journals, vol. 14(2), pages 129-139.
    3. Glismann, Hans H. & Horn, Ernst-Jürgen & Schrader, Klaus, 1993. "Wohlfahrtseffekte von Rüstungs- und Raumfahrtausgaben: Das Beispiel der Vereinigten Staaten," Open Access Publications from Kiel Institute for the World Economy 783, Kiel Institute for the World Economy (IfW Kiel).
    4. Jenn-Hong Tang & Cheng-Chung Lai & Eric Lin, 2009. "Military Expenditure And Unemployment Rates: Granger Causality Tests Using Global Panel Data," Defence and Peace Economics, Taylor & Francis Journals, vol. 20(4), pages 253-267.
    5. Mohsen Bahmani-Oskooee & Gour Goswami, 2006. "Military spending and the black market premium in developing countries," Review of Social Economy, Taylor & Francis Journals, vol. 64(1), pages 77-91.
    6. Yuan, Mingwei & Li, Wenli, 2000. "Dynamic employment and hours effects of government spending shocks," Journal of Economic Dynamics and Control, Elsevier, vol. 24(8), pages 1233-1263, July.
    7. Cheng-Te Lee, 2022. "Military Spending and Employment," Defence and Peace Economics, Taylor & Francis Journals, vol. 33(4), pages 501-510, May.
    8. Eric S. Lin & Hamid E. Ali, 2009. "Military Spending and Inequality: Panel Granger Causality Test," Journal of Peace Research, Peace Research Institute Oslo, vol. 46(5), pages 671-685, September.
    9. John D. Abell, 1992. "Defense Spending and Unemployment Rates:," American Journal of Economics and Sociology, Wiley Blackwell, vol. 51(1), pages 27-42, January.
    10. Ucal, Meltem & Karabulut, Gokhan & Bilgin, Mehmet Huseyin, 2009. "Military Expenditures and Inequality: Empirical Evidence from Israel," MPRA Paper 48643, University Library of Munich, Germany.
    11. Caruso Raul & Antonella Biscione, 2022. "Militarization and Income Inequality in European Countries (2000–2017)," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 28(3), pages 267-285, September.
    12. Adem Yavuz Elveren & Sara Hsu, 2018. "The Effect of Military Expenditure on Profit Rates: Evidence from Major Countries," World Journal of Applied Economics, WERI-World Economic Research Institute, vol. 4(2), pages 75-94, December.
    13. Thomas Bernauer & Vally Koubi & Fabio Ernst, 2009. "National and Regional Economic Consequences of Swiss Defense Spending," Journal of Peace Research, Peace Research Institute Oslo, vol. 46(4), pages 467-484, July.
    14. Kollias Christos & Paleologou Suzanna-Maria & Tzeremes Panayiotis, 2020. "Defence Spending and Unemployment in the USA: Disaggregated Analysis by Gender and Age Groups," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 26(2), pages 1-13, May.

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