Abstract
Central banks often provide liquidity support during financial crises to reduce bank exits and boost real economic activities. Does such interventions lead to differences in credit provision and real economic activities after the crisis? What were the effects on households and workers? This paper uses the policy differences between the Federal Reserve Bank of Atlanta and St. Louis during the Great Depression to identify the causal relationship between banking access and post-crisis socioeconomic outcomes. We combine newly digitized bank-level balance sheet data with Census microdata to show that the Federal Reserve Bank of Atlanta's liquidity support successfully reduced bank exits and increased loans and deposits in towns. The results were concentrated in towns with a lower level of bank competition. While the liquidity support did not increase the likelihood of migration for workers, those who were working in 1930 were more likely to stay in the labor market or switch to agricultural sectors in 1940 in less competitive markets. Using the Census of Agriculture and Manufactures, we find that the liquidity support increased in farm outputs and enabled small manufacturing firms to acquire more input materials and increase the value of output after the crisis. JEL Classification: G21, N22, N62, E44