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Education and Income in the Early 20th Century: Evidence from the Prairies

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Author Info
Claudia Goldin
Lawrence F. Katz

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Abstract

We present the first estimates of the returns to years of schooling before 1940 using a large sample of men and women, employed in a variety of sectors and occupations, from the Iowa State Census of 1915. We find that the returns to a year of high school, and to a year of college, were substantial in 1915 - about 11 percent for all males and in excess of 12 percent for young males. Some of the return to years of high school and college arose because more education allowed individuals to enter lucrative white-collar jobs. But we also find sizable educational wage differentials within the white- and blue-collar sectors. Returns to education above the 'common school' grades were substantial even within the agricultural sector. Given the high overall rate of return to secondary schooling, it is no wonder that the 'high school movement' took root in America around 1910, even in agricultural areas such as Iowa. Census data for 1940, 1950, and 1960 are used to show that returns to years of schooling were greater in 1915 than in 1940. We conclude that the return to education decreased sometime between 1915 and 1940 and then declined again during the 1940s.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 7217.

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Date of creation: Jul 1999
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Publication status: published as Goldin, Claudia and Lawrence Katz. "Education And Income In The Early Twentieth Century: Evidence From The Prairies," Journal of Economic History, 2000, v60(3,Sep), 782-818.
Handle: RePEc:nbr:nberwo:7217

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Find related papers by JEL classification:
J2 - Labor and Demographic Economics - - Demand and Supply of Labor
N3 - Economic History - - Labor and Consumers, Demography, Education, Income, and Wealth

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Claudia Goldin & Lawrence F. Katz, 1998. "The Origins Of Technology-Skill Complementarity," The Quarterly Journal of Economics, MIT Press, vol. 113(3), pages 693-732, August. [Downloadable!] (restricted)
    Other versions:
  2. Claudia Goldin & Lawrence F. Katz, 1999. "The Returns to Skill in the United States across the Twentieth Century," NBER Working Papers 7126, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  3. Welch, F, 1970. "Education in Production," Journal of Political Economy, University of Chicago Press, vol. 78(1), pages 35-59, Jan.-Feb.. [Downloadable!] (restricted)
  4. Lillard, Lee & Smith, James P & Welch, Finis, 1986. "What Do We Really Know about Wages? The Importance of Nonreporting and Census Imputation," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages 489-506, June. [Downloadable!] (restricted)
    Other versions:
  5. Card, David, 1999. "The causal effect of education on earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 30, pages 1801-1863 Elsevier. [Downloadable!] (restricted)
  6. Chinhui Juhn, 1999. "Wage inequality and demand for skill: Evidence from five decades," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 52(3), pages 424-443, April.
  7. Bishop, John Hillman, 1989. "Is the Test Score Decline Responsible for the Productivity Growth Decline?," American Economic Review, American Economic Association, vol. 79(1), pages 178-97, March. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Jens Ludwig & Douglas L. Miller, 2005. "Does Head Start Improve Children's Life Chances? Evidence from a Regression Discontinuity Design," NBER Working Papers 11702, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  2. M Manacorda, 2003. "Child Labor and the Labor Supply of Other Household Members: Evidence from 1920 America," CEP Discussion Papers dp0590, Centre for Economic Performance, LSE. [Downloadable!]
  3. Claudia Goldin & Lawrence F. Katz, 2003. "The "Virtues" of the Past: Education in the First Hundred Years of the New Republic," NBER Working Papers 9958, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  4. Daniel Aaronson & Daniel Sullivan, 2001. "Growth in worker quality," Economic Perspectives, Federal Reserve Bank of Chicago, issue Q IV, pages 53-74. [Downloadable!]
  5. Jaime Reis, 2003. "Human Capital and industrialization: The case of a Later Comer (Portugal, 1890)," Anais do V Congresso Brasileiro de História Econômica e 6ª Conferência Internacional de História de Empresas [Proceedings of the 5th Brazilian Congress of Economic History and the 6th Internation 021, ABPHE - Associação Brasileira de Pesquisadores em História Econômica (Brazilian Economic History Society). [Downloadable!]
  6. Peter Thompson, 2003. "Technological Change and the Age-Earnings Profile: Evidence from the International Merchant Marine, 1861-1912," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 6(3), pages 578-601, July. [Downloadable!] (restricted)
  7. Claudia Goldin, 2002. "The Rising (and then Declining) Significance of Gender," NBER Working Papers 8915, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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