NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Decline of Non-Competing Groups: Changes in the Premium to Education, 1890 to 1940

Claudia Goldin, Lawrence F. Katz

NBER Working Paper No. 5202
Issued in August 1995
NBER Program(s):   DAE   LS

Between 1890 and the late 1920s the premium to high school education declined substantially for both men and women. In 1890 ordinary office workers, whose positions generally required a high school diploma, earned almost twice what production workers did. But by the late 1920s they earned about one and one-half times as much. The premium earned by female office workers, male office workers, and male office workers plus supervisors fell by about 30%. Several factors operated in tandem to narrow differentials to education. The supply of high school graduates relative to those without high school degrees increased by 16% from 1890 to 1910, but by 40% from 1910 to 1920 and by 50% from 1920 to 1930. Immigration restriction is another factor, but is dwarfed by the expansion of high schools; reduced immigrant flows explain just 1/8th of the relative supply increase of educated workers. The impact of rapidly increasing supplies of high school educated workers was reinforced by technological changes in the office that enabled the substitution of educated workers and machines for the exceptionally able. The premium to high school graduation, rather than declining further in the 1930s, levelled off as the demand for high school educated workers expanded in the manufacturing sector. We make comparisons between this historical period of narrowing wage differentials in the face of technological progress in the office and ours of widening differentials.

download in pdf format
   (661 K)

email paper

This paper is available as PDF (661 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w5202

Users who downloaded this paper also downloaded these:
Poterba, Venti, and Wise w5287 The Effects of Special Saving Programs on Saving and Wealth
Lamont w5284 Macroeconomics Forecasts and Microeconomic Forecasters
Krugman w0333 Vehicle Currencies And the Structure Of International Exchange
Summers, Minsky, Samuelson, Poole, and Volcker Macroeconomic Consequences of Financial Crises
Goldin and Katz w12984 The Race between Education and Technology: The Evolution of U.S. Educational Wage Differentials, 1890 to 2005
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us