TY  - JOUR
AU  - Kaboski,Joseph
AU  - Logan,Trevon D.
TI  - Factor Endowments and the Returns to Skill: New Evidence from the American Past
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 13589
PY  - 2007
Y2  - November 2007
UR  - http://www.nber.org/papers/w13589
L1  - http://www.nber.org/papers/w13589.pdf
N1  - Author contact info:
Joseph P. Kaboski
Department of Economics
University of Notre Dame
434 Flanner Hall
Notre Dame, IN 46556
Tel: 574/631-9906
E-Mail: jkaboski@nd.edu

Trevon Logan
The Ohio State University
410 Arps Hall
1945 N. High Street
Columbus, OH 43210
Tel: 614-292-0762
Fax: 614-292-3906
E-Mail: logan.155@osu.edu
AB  - The existing literature on skill-biased technical change has not considered how the technological endowment itself plays a role in the returns to skill. This paper constructs a simple model of skill biased technical change which highlights the role that resource endowments play in the returns to education. The model predicts variation in returns to education with skill biased technological change if there is significant heterogeneity in resource endowments before the technological change. Using a variety of historical sources, we document the heterogeneous technology levels by region in the American past. We then estimate the returns to education of high school teachers in the early twentieth century using a new data source. a report from the U.S. Commissioner of Education in 1909. Overall, we find significant regional variation in the returns to education that match differences in resource endowments, with large (within-occupation) returns for the Midwest and Southwest (7%), but much lower returns in the South (3%) and West (0.5%). We also show that our results are generalizable to returns to education in the United States and that returns to education for teachers tracked quite closely with the overall returns to education from 1940 onward.
ER  -