Human Capital and History: The American Record

December 7-8, 2012
Leah Boustan of the University of California, Los Angeles, and Robert Margo and Carola Frydman of Boston University, Organizers

Lawrence Katz, Harvard University and NBER, and Robert Margo

Technical Change and the Relative Demand for Skilled Labor: The United States in Historical Perspective

Katz and Margo revisit the historical evolution of capital-skill complementarity in the United States and with it, shifts over time in the relative demand for skilled labor. Their paper makes three points. First, although de-skilling in the conventional sense did occur overall in nineteenth century manufacturing, a more nuanced picture suggests that the occupation distribution "hollowed out." By hollowing out, they mean that the share of "middle-skill" jobs (artisans) declined while the shares of "high-skill" (white collar, non-production workers) and "low-skill" (operatives and laborers) jobs increased. Second, unlike the pattern observed in manufacturing, de-skilling did not occur in the aggregate economy; rather, the aggregate shares of low-skill jobs decreased, middle-skill jobs remained steady, and high-skill jobs expanded from the 1850 to the early twentieth century. The pattern of monotonic skill upgrading in the aggregate economy continued through much of the twentieth century until the recent period of hollowing out and "polarization" of labor demand since the late 1980s. Third, new archival evidence on wages suggests that the demand for high-skill (white collar) workers grew more rapidly than the supply starting well before the Civil War to the end of the nineteenth century.

Edward Glaeser, Harvard University and NBER

Urbanization and Human Capital Formation in American History

An overwhelming majority of men and women born early in the twentieth century believed that it was better for women not to work outside the home; now, a majority believes that paid work is appropriate for both genders. Thus it is reasonable to think that beliefs about women's ability levels also have changed. In his paper, Glaeser presents a series of models examining the social formation of beliefs about women's roles and ability levels. His first model follows Betty Friedan and examines the formation of beliefs by providers of consumer goods. He concludes that they only have the incentives to supply error when their products complement women's time in the household and when production is highly oligopolistic. A second model focuses on the formation of beliefs by in-group workforce members eager to discredit possible competitors. Finally, Glaeser turns to belief formation in the household, where husbands and parents perpetuate stereotypes in order to encourage women to spend more time in the household and to have more children. If children overestimate their parents' level of altruism, then parental misinformation will be more effective and prevalent. Theory predicts that the twentieth century postponement of female child-bearing may strongly reduced the supply of gender-related misinformation, because delay provides hard data which reduces the power and prevalence of false beliefs.

Claudia Olivetti, Boston University and NBER

The Female Labor Force and Long-run Development: The American Experience in Comparative Perspective

What is the relationship between gender equality and economic development? In her influential body of work, Claudia Goldin sheds light on the process of transformation of women's status in the history of the United States and through a cross-section of the world's economies. In a series of seminal papers, she establishes the existence of a U-shaped labor supply of women across the process of economic development and the important roles of education and of the emergence of a white-collar sector in fostering the paid employment of married women. Olivetti builds upon this work by providing additional evidence on the relationship between the process of economic development and women's labor force participation. Specifically, she investigates whether the U.S. experience was exceptional historically and whether the timing of a country's transition to a modern path of economic development affects the shape of women's labor supply.

Martha Bailey, University of Michigan and NBER; Melanie Guldi, University of Central Florida; and Brad Hershbein, W.E. Upjohn Institute for Employment Research

Two Twentieth Century Fertility Transitions: Implications for Human Capital

Bailey, Guldi, and Hershbein compare U.S. fertility transitions in the early twentieth century to the post-1960 period. After affirming the similarities between declines in period fertility rates (births in a year per indicated population) and mean completed childbearing (cohort-based measures from the Census), they describe five distinct features of the post-1960 period. First, cohorts reaching childbearing age during after 1960 were substantially more likely to have exactly two children and significantly less likely to be childless. Second, the post-1960 period also witnessed a decoupling of sex and marriage, sex and childbearing, and marriage and childbearing. Cohorts reaching childbearing age in that period formed their first households (through marriage or cohabitation) at similar ages as cohorts born from 1900 to 1910, but the recent cohorts were much more likely to precede first marriage with non-marital cohabitation. Third, more recent cohorts delayed motherhood compared to the cohorts born from 1900 to 1910 and, among women marrying before having children, increased the interval between first marriage and motherhood. Fourth, these cohorts had intercourse at earlier ages but gave birth at later ages and more frequently outside of marriage. Fifth, mothers' education has become an increasingly strong predictor of age-at-first birth and non-marital childbearing in the post-1960 period. These five features of the post-1960 period have implications for behavioral models of childbearing and the human capital acquisition of women and children.

Shelly Lundberg, University of California, Santa Barbara, and Robert Pollak, Washington University in St. Louis and NBER

The Uneven Retreat from Marriage in the U.S., 1950-2010

Lundberg and Pollak argue that marriage is a commitment device that facilitates rearing children who are successful by middle class standards. They do not claim that this accounts for all marriages. It is consistent with the need for intertemporal commitment, and is consistent with positive assortative mating. It is also consistent with the class gradient: that is, both class-specific differences in the definition of "successful" children and class-specific differences in the technology (or beliefs about the technology) for rearing "successful" children.

Nora Gordon, Georgetown University and NBER

Explaining Trends in High School Graduation: The Changing Elementary and Secondary Education Policy Landscape and Income Inequality over the Last Half Century

Gordon focuses on the role of elementary and secondary educational institutions in the United States, which have changed dramatically over the latter half of the century, in determining high school graduation rates. In part, these institutional changes have been formally legislated and implemented as specific programs, but the programs alone do not explain the full extent of the dramatic rise in spending. She reviews the relevant literature and the policy history, and presents an original descriptive analysis of the role of income inequality in shaping graduation and spending from 1963 to 2007. Her results suggest that inequality, which previous research establishes as negatively correlated with the establishment of public secondary schooling earlier in the twentieth century, was positively correlated with both education spending levels and aggregate high school graduation rates at the state level. This relationship holds with inequality at the bottom of the distribution as well as at the top.

Hoyt Bleakley, University of Chicago and NBER, and Dora Costa and Adriana Lleras-Muney, University of California at Los Angeles and NBER

Health, Education and Income Trends in the US

Bleakley, Costa, and Lleras-Muney present new evidence on twentieth century trends in early health, including birth weights, mothers' health, and within-sibling comparisons. Using microdata on health, human capital, and productivity from the nineteenth and twentieth century, they investigate changes in the relationships between these variables over time. Early-life health (proxied by height) affected income and health outcomes throughout the past 150 years. But it was not until relatively late that childhood health became strongly complementary with time in school. They relate these results to a standard (Ben Porath) model in which the returns to brute force decline relative to cognition, and the variance of environmental insults declines as well.

Leah Boustan, and William Collins, Vanderbilt University and NBER

The Origins and Persistence of Black-White Differences in Women's Labor Force Participation

Black women were more likely than white women to participate in the labor force from 1870 until at least 1980 and to hold jobs in agriculture or manufacturing. Differences in observables cannot account for most of this racial gap in labor force participation for the one hundred years after Emancipation. This is consistent with racial differences in the stigma associated with women's work, which Goldin (1977) hypothesized might be traced to cultural norms rooted in the prevalence of black women's labor under slavery. In both nineteenth and twentieth century data, Boustan and Collins find evidence of intergenerational transmission of labor force participation from mother to daughter.

Claudia Goldin, Harvard University and NBER

A Pollution Theory of Discrimination: Male and Female Differences in Occupations and Earnings

Occupations are segregated by sex today, but they were far more segregated in the early- to mid-twentieth century. It is difficult to rationalize sex segregation and "wage discrimination" on the basis of men's taste for distance from women in the same way that differences between other groups in work and housing have been explained. Rather, Goldin constructs a "pollution" theory model of discrimination: occupations are defined by the level of a single-dimensional productivity characteristic. Because there is asymmetric information regarding the value of the characteristic of an individual woman, a new female hire may reduce the prestige of a previously all-male occupation. The model predicts that occupations requiring a level of the characteristic above the female median will be segregated by sex and those below the median will be integrated. The historical record reveals numerous cases of the model's predictions. For example, in 1940 the greater is the productivity characteristic of an office and clerical occupation, the higher is the occupational segregation by sex. "Credentialization" that spreads information about individual women's productivities and shatters old stereotypes can help to expunge "pollution."

Ilyana Kuziemko, Columbia University and NBER, and Joseph Ferrie, Northwestern University and NBER

The Role of Immigrant Children in their Parents' Assimilation: 1850 to 2010

The presence of children in immigrant households can influence the assimilation of their parents, either through human capital transfers from children to parents (that is, parents learning from their children) or by the assistance that children can provide in navigating economic life in the destination (that is, parents leaning on their children). Kuziemko and Ferrie examine the relationship between the presence of children in immigrant households and the human capital acquisition of their immigrant parents among immigrants to the United States from 1850-2010. They first show that immigrants who came in the Great Migration of the late nineteenth and early twentieth centuries were less likely to arrive with children than more recent immigrants. Next they show that assimilation appears slower for most recent cohorts than for those who arrived during the Great Migration, although in both eras cohort quality declines over time. Finally, they show that the children of the earlier immigrants were associated with more assimilation (that is, less "leaning" and more "learning") than were the children of post-1930 immigrants.