Moonshot: Public R&D and Growth

We estimate the long-term effect of public R&D on growth in manufacturing by analyzing new data from the Cold War era Space Race.We develop a novel empirical strategy that leverages US-Soviet rivalry in space technology to isolate windfall R&D spending.Our results demonstrate that public R&D conducted by NASA contractors increased manufacturing value added, employment, and capital accumulation in space related sectors.While migration responses were important, they were not sufficient to generate a wedge between local and national effects.The iconic Moonshot R&D program had meaningful economic effects for both the local and national space related sectors.Yet the magnitudes of the estimated effects seem to align with those of other non-R&D types of government expenditures.