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


  • Robert A. Margo


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.

Suggested Citation

  • Robert A. Margo, 2002. "The North-South Wage Gap, Before and After the Civil War," NBER Working Papers 8778, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:8778
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    References listed on IDEAS

    1. 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.
    2. Michael R. Haines, 1989. "Consumer Behavior and Immigrant Assimilation: A comparison of the United States, Britain and Germany, 1889/1890," NBER Historical Working Papers 0006, National Bureau of Economic Research, Inc.
    3. Irwin James R., 1994. "Explaining the Decline in Southern per Capita Output after Emancipation," Explorations in Economic History, Elsevier, vol. 31(3), pages 336-356, July.
    4. 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.
    5. 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, vol. 27(02), pages 151-197, June.
    6. Coelho, Philip R. P. & Shepherd, James F., 1976. "Regional differences in real wages: The United States, 1851-1880," Explorations in Economic History, Elsevier, vol. 13(2), pages 203-230, April.
    7. Higgs, Robert, 1977. "Firm-Specific Evidence on Racial Wage Differentials and Workforce Segregation," American Economic Review, American Economic Association, vol. 67(2), pages 236-245, March.
    8. Fogel, Robert W & Engerman, Stanley L, 1977. "Explaining the Relative Efficiency of Slave Agriculture in the Antebellum South," American Economic Review, American Economic Association, vol. 67(3), pages 275-296, June.
    9. Margo, Robert A., 1999. "Regional Wage Gaps and the Settlement of the Midwest," Explorations in Economic History, Elsevier, vol. 36(2), pages 128-143, April.
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    Cited by:

    1. Collins, William J. & Margo, Robert A., 2006. "Historical Perspectives on Racial Differences in Schooling in the United States," Handbook of the Economics of Education, Elsevier.
    2. Bruce Sacerdote, 2005. "Slavery and the Intergenerational Transmission of Human Capital," The Review of Economics and Statistics, MIT Press, vol. 87(2), pages 217-234, May.
    3. 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.

    More about this item

    JEL classification:

    • N31 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - U.S.; Canada: Pre-1913

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