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The North-South Wage Gap, Before and After the Civil War

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  • Robert A. Margo

Abstract

In an economy with 'national' factor markets, the factor price effects of a permanent, regional specific shock register everywhere, perhaps with a brief lag. The United States in the nineteenth century does not appear to have been such an economy. Using data for a variety of occupations, I document that the Civil War occasioned a dramatic divergence in the regional structure of wages -- in particular, wages in the South Atlantic and South Central states relative to the North fell sharply after the War. The divergence was immediate, being apparent as early as 1866. It was persistent: for none of the occupations examined did the regional wage structure return to its ante-bellum configuration by century's end. The divergence cannot be explained by the changing racial composition of the Southern wage labor force after the War, but does appear consistent with a sharp drop in labor productivity in Southern agriculture. I also use previously neglected data to argue that the South probably experienced a decline in the relative price of non-traded goods after the War.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 8778.

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Date of creation: Feb 2002
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Publication status: published as Eltis, D., F. Lewis, and K. Sokoloff (eds.) Slavery in the Development of the Americas. New York: Cambridge University Press, 2004.
Handle: RePEc:nbr:nberwo:8778

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  1. David, Paul A., 1967. "The Growth of Real Product in the United States Before 1840: New Evidence, Controlled Conjectures," The Journal of Economic History, Cambridge University Press, Cambridge University Press, vol. 27(02), pages 151-197, June.
  2. Irwin James R., 1994. "Explaining the Decline in Southern per Capita Output after Emancipation," Explorations in Economic History, Elsevier, Elsevier, vol. 31(3), pages 336-356, July.
  3. Howard Bodenhorn & Hugh Rockoff, 1992. "Regional Interest Rates in Antebellum America," NBER Chapters, in: Strategic Factors in Nineteenth Century American Economic History: A Volume to Honor Robert W. Fogel, pages 159-187 National Bureau of Economic Research, Inc.
  4. Coelho, Philip R. P. & Shepherd, James F., 1976. "Regional differences in real wages: The United States, 1851-1880," Explorations in Economic History, Elsevier, Elsevier, vol. 13(2), pages 203-230, April.
  5. Marvin Towne & Wayne Rasmussen, 1960. "Farm Gross Product and Gross Investment in the Nineteenth Century," NBER Chapters, in: Trends in the American Economy in the Nineteenth Century, pages 255-316 National Bureau of Economic Research, Inc.
  6. Margo, Robert A., 1999. "Regional Wage Gaps and the Settlement of the Midwest," Explorations in Economic History, Elsevier, Elsevier, vol. 36(2), pages 128-143, April.
  7. Higgs, Robert, 1977. "Firm-Specific Evidence on Racial Wage Differentials and Workforce Segregation," American Economic Review, American Economic Association, American Economic Association, vol. 67(2), pages 236-45, March.
  8. Michael R. Haines, 1989. "Consumer Behavior and Immigrant Assimilation: A comparison of the United States, Britain and Germany, 1889/1890," NBER Historical Working Papers, National Bureau of Economic Research, Inc 0006, National Bureau of Economic Research, Inc.
  9. Fogel, Robert W & Engerman, Stanley L, 1977. "Explaining the Relative Efficiency of Slave Agriculture in the Antebellum South," American Economic Review, American Economic Association, American Economic Association, vol. 67(3), pages 275-96, June.
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Cited by:
  1. William J. Collins & Robert A. Margo, 2003. "Historical Perspectives on Racial Differences in Schooling in the United States," Vanderbilt University Department of Economics Working Papers 0313, Vanderbilt University Department of Economics.
  2. Stanley L. Engerman & Robert A. Margo, 2010. "Free Labor and Slave Labor," NBER Chapters, in: Founding Choices: American Economic Policy in the 1790s, pages 291-314 National Bureau of Economic Research, Inc.
  3. Robert A. Margo, 2004. "Ideology, Government, and the American Dilemma," Vanderbilt University Department of Economics Working Papers 0411, Vanderbilt University Department of Economics, revised May 2004.
  4. Bruce Sacerdote, 2002. "Slavery and the Intergenerational Transmission of Human Capital," NBER Working Papers 9227, National Bureau of Economic Research, Inc.

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