TY  - JOUR
AU  - Goldin,Claudia
AU  - Katz,Lawrence F.
TI  - The Returns to Skill in the United States across the Twentieth Century
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 7126
PY  - 1999
Y2  - May 1999
UR  - http://www.nber.org/papers/w7126
L1  - http://www.nber.org/papers/w7126.pdf
N1  - Author contact info:
Claudia Goldin
National Bureau of Economic Research
1050 Massachusetts Ave.
Cambridge, MA 02138
Tel: 617/613-1200
Fax: 617/613-1245
E-Mail: cgoldin@harvard.edu

Lawrence F. Katz
Department of Economics
Harvard University
Cambridge, MA  02138
Tel: 617/495-5148
Fax: 617/613-1245
E-Mail: lkatz@harvard.edu
AB  - Economic inequality is higher today than it has been since 1939, as measured by both the wage structure and wealth inequality. But the comparison between 1939 and 1999 is largely made out of necessity; the 1940 U.S. population census was the first to inquire of wage and salary income and education. We address what the returns to skill were prior to 1940 and piece together the first century-long history of skill premiums, the dispersion of the wage structure, and returns to formal schooling.  We use the 1915 Iowa State Census, a remarkable and unique document, as well as several less-obscure but untapped reports.  Using all of these sources, we find that the wage structure narrowed at several moments in the first half of the 20th century, not just in the 1940s, both coinciding with major economic disruptions brought about by war.  The returns to education were in fact higher in 1914 than in 1939, and the enormous expansion in secondary schooling beginning in the 1910s was a contributing factor to the decrease in educational returns.  Inequality and the returns to education across the entire century, therefore, first declined before their more recent and steep ascent.
ER  -