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Title: The Returns to Skill across the Twentieth Century United States

Citation Type: Working Paper

Publication Year: 1999

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Abstract: Economic inequality is higher today than at any time in the past sixty years, measured by both the wage structure and wealth inequality. But the comparison between 1939 and 1999 is largely made out of necessity, since the 1940 U.S. population census was the first to inquire of wage and salary income and education.In this paper we address what the returns to skill were in the United States prior to 1940 and piece together a full century of skill premiums, the dispersion of the wage structure, and the returns to formal schooling. We examine the long run history of distribution in the United States through the lens of the wage structure and the returns to schooling and are able to do so because of the recent retrieval of a remarkable and unique document - the 1915 Iowa State Census. We also use several less-obscure materials but ones, nonetheless, that have remained dormant. Using all of these sources, we find that the wage structure narrowed at several moments in the first half of the century, both coinciding with major economic disruptions brought about by war, inflation, and union activity. The returns to education were in fact higher in 1914 than in 1939, and the enormous expansion in secondary schooling was a contributing factor.

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Authors: Katz, Lawrence F.; Goldin, Claudia

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Publication Number: 7126

Institution: National Bureau of Economic Research

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Publisher Location: Cambridge, MA

Data Collections: IPUMS USA

Topics: Education, Labor Force and Occupational Structure

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