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Laws, Educational Outcomes, and Returns to Schooling: Evidence from the Full Count 1940 Census

Author

Listed:
  • Karen Clay
  • Jeff Lingwall
  • Melvin Stephens, Jr.

Abstract

This paper uses a new dataset on state compulsory attendance, continuation school, and child labor laws with the 1940 full count Census of Population to estimate the returns to schooling for native-born white men in the 1885-1912 birth cohorts. IV estimates of returns to schooling range from 0.064 to 0.079. Quantile IV estimates show that the returns to schooling were largest for the lowest quantiles, and were generally monotonically decreasing for higher quantiles. These findings suggest that early schooling laws may have contributed to the Great Compression by increasing education levels for white men at the bottom of the distribution.

Suggested Citation

  • Karen Clay & Jeff Lingwall & Melvin Stephens, Jr., 2016. "Laws, Educational Outcomes, and Returns to Schooling: Evidence from the Full Count 1940 Census," NBER Working Papers 22855, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:22855
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    References listed on IDEAS

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    1. Claudia Goldin & Lawrence F. Katz, 1999. "Education and Income in the Early 20th Century: Evidence from the Prairies," NBER Working Papers 7217, National Bureau of Economic Research, Inc.
    2. Claudia Goldin, 1999. "Egalitarianism and the Returns to Education during the Great Transformation of American Education," Journal of Political Economy, University of Chicago Press, vol. 107(S6), pages 65-94, December.
    3. Keith Finlay & Leandro M. Magnusson, 2009. "Implementing weak-instrument robust tests for a general class of instrumental-variables models," Stata Journal, StataCorp LP, vol. 9(3), pages 398-421, September.
    4. Goldin, Claudia D. & Katz, Lawrence F., 1999. "Human Capital and Social Capital: The Rise of Secondary Schooling in America, 1910–1940," Scholarly Articles 29429088, Harvard University Department of Economics.
    5. Melvin Stephens Jr. & Dou-Yan Yang, 2014. "Compulsory Education and the Benefits of Schooling," American Economic Review, American Economic Association, vol. 104(6), pages 1777-1792, June.
    6. Marcelo J. Moreira, 2003. "A Conditional Likelihood Ratio Test for Structural Models," Econometrica, Econometric Society, vol. 71(4), pages 1027-1048, July.
    7. Goldin, Claudia & Katz, Lawrence F., 2000. "Education and Income in the Early Twentieth Century: Evidence from the Prairies," The Journal of Economic History, Cambridge University Press, vol. 60(3), pages 782-818, September.
    8. Lindert, Peter H., 2000. "Three centuries of inequality in Britain and America," Handbook of Income Distribution, in: A.B. Atkinson & F. Bourguignon (ed.),Handbook of Income Distribution, edition 1, volume 1, chapter 3, pages 167-216, Elsevier.
    9. Claudia Goldin & Robert A. Margo, 1992. "The Great Compression: The Wage Structure in the United States at Mid-Century," The Quarterly Journal of Economics, Oxford University Press, vol. 107(1), pages 1-34.
    10. repec:hrv:faseco:30703979 is not listed on IDEAS
    11. Lleras-Muney, Adriana, 2002. "Were Compulsory Attendance and Child Labor Laws Effective? An Analysis from 1915 to 1939," Journal of Law and Economics, University of Chicago Press, vol. 45(2), pages 401-435, October.
    12. Joshua D. Angrist & Alan B. Keueger, 1991. "Does Compulsory School Attendance Affect Schooling and Earnings?," The Quarterly Journal of Economics, Oxford University Press, vol. 106(4), pages 979-1014.
    13. Moehling, Carolyn M., 1999. "State Child Labor Laws and the Decline of Child Labor," Explorations in Economic History, Elsevier, vol. 36(1), pages 72-106, January.
    14. Chernozhukov, Victor & Hansen, Christian, 2008. "Instrumental variable quantile regression: A robust inference approach," Journal of Econometrics, Elsevier, vol. 142(1), pages 379-398, January.
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    Cited by:

    1. James J. Feigenbaum & Hui Ren Tan, 2019. "The Return to Education in the Mid-20th Century: Evidence from Twins," NBER Working Papers 26407, National Bureau of Economic Research, Inc.
    2. Brian Beach & Karen Clay & Martin H. Saavedra, 2020. "The 1918 Influenza Pandemic and its Lessons for COVID-19," NBER Working Papers 27673, National Bureau of Economic Research, Inc.

    More about this item

    JEL classification:

    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • N32 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - U.S.; Canada: 1913-

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