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Title: The Race between Education and Technology: The Evolution of U.S. Educational Wage Differentials, 1890 to 2005
Citation Type: Working Paper
Publication Year: 2007
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Abstract: U.S. educational and occupational wage differentials were exceptionally high at the dawn of the twentiethcentury and then decreased in several stages over the next eight decades. But starting in the early 1980sthe labor market premium to skill rose sharply and by 2005 the college wage premium was back atits 1915 level. The twentieth century contains two inequality tales: one declining and one rising. Weuse a supply-demand-institutions framework to understand the factors that produced these changesfrom 1890 to 2005. We find that strong secular growth in the relative demand for more educated workerscombined with fluctuations in the growth of relative skill supplies go far to explain the long-run evolutionof U.S. educational wage differentials. An increase in the rate of growth of the relative supply of skillsassociated with the high school movement starting around 1910 played a key role in narrowing educationalwage differentials from 1915 to 1980. The slowdown in the growth of the relative supply of collegeworkers starting around 1980 was a major reason for the surge in the college wage premium from1980 to 2005. Institutional factors were important at various junctures, especially during the 1940sand the late 1970s.
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Authors: Goldin, Claudia; Katz, Lawrence F.
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Publication Number: 12984
Institution: NATIONAL BUREAU OF ECONOMIC RESEARCH
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Data Collections: IPUMS USA
Topics: Education, Labor Force and Occupational Structure, Migration and Immigration
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