Development of the American Economy

The NBER's Program on the Development of the American Economy, directed by Claudia Goldin of Harvard University, met in Cambridge on March 10. The following papers were discussed:

Rosenbloom and Sundstrom explore several ways of using individual-level data drawn from the Integrated Public Use Microdata Samples of the U.S. Population Censuses (IPUMS) to trace the evolution of migration behavior. They construct two measures of interstate migration over the past 150 years. The first measure considers an individual to have moved if he or she is residing in a state different from his or her state of birth. The second measure considers a family to have moved if it is residing in a state different from the state of birth of one of its young children. They use these measures to follow interstate migration patterns for successive synthetic birth cohorts of individuals from 1850 through 1990. These allow the authors to describe life-cycle patterns of migration and how they have changed over time. Migration was always most common among the young, but this relationship has grown stronger over time. Comparing migration behavior across cohorts, the authors find that migration propensities have followed a U-shaped pattern since 1850, falling until around 1900 and then rising until around 1970. They also find evidence of substantial differences by race, sex, and region in migration behavior.

Margo, Atack, and Bateman use data from the manuscript census of manufacturing to estimate the effects of the length of the working day on output and wages. They find that the elasticity of output with respect to daily hours worked was positive but less than one, implying diminishing returns to increases in working hours. When the annual number of days worked is held constant, the average annual wage is related positively to daily hours worked, but again the elasticity is less than one. At ten hours per day, the marginal benefits to employers of a shorter working day - lower wage bills - were approximately offset by the marginal cost - lower output.

The American economy experienced financial crisis in May of 1837 and October of 1839. The Panic of 1837 has been studied in detail, but the Crisis of 1839 brought on four years of deflation and recession. Wallis examines the role of state government investment in canals, railroads, and banks and the large debts created to finance those investments, in the swift economic recovery in 1838, and the long decline that set in after 1839.

By the time Congress passed the 1964 Civil Rights Act, 98 percent of non- Southern blacks were already covered by state-level "fair employment" laws which prohibited labor market discrimination. Collins assesses the impact of fair employment legislation on black workers' income, unemployment, labor force participation, and occupational and industrial distributions relative to whites. He finds that in general the fair employment laws had small or negligible effects on the labor market outcomes of black men but somewhat stronger positive effects on the labor market outcomes of black women.

Haines explains that in the United States as in many other nations in the 19th and early 20th centuries, there was a substantial mortality "penalty" to living in urban places. By around 1940, this penalty had been largely eliminated, and in many cases it was healthier to reside in the city than in the countryside. Despite the lack of systematic national data before 1933, it is possible to describe the phenomenon of the urban mortality transition. Early in the 19th century, the United States was not particularly urban (only 6.1 percent in 1800), a circumstance which led to a relatively favorable mortality situation. A national crude death rate of 20-25 per thousand per year would have been likely. Some early data indicate that mortality was substantially higher in cities, was higher in larger relative to smaller cities, and was higher in the South relative to the North. By 1900, the nation had become about 40 percent urban (and 56 percent by 1940). It appears that death rates actually rose (or at least did not decline) over the middle of the 19th century. Increased urbanization, as well as developments in transport and commercialization and increased movements of people into and throughout the nation, contributed to this. The sustained mortality transition only began about the 1870s. Thereafter the decline of urban mortality proceeded faster than in rural places, assisted by significant public works improvements and advances in public health and eventually medical science. Much of the process had been completed by the 1940s. The urban penalty had been largely eliminated and mortality continued to decline despite the continued growth in the urban share of the population.