Education, the wage structure, and technological change: learning about the present through the past.
Author | Goldin, Claudia |
Human Capital Issues of Our Day
Rising income inequality and the possible causal roles of education and technological change are among the most prominent issues of our day. Earnings inequality has been rising since at least the late-1970s, as manifested in both the increased returns to education and the widening of the income distribution within groups. Many assert that high schools are failing to adequately train youths not bound for college and have serious shortcomings even for those who do continue their education. Employers today, it has been argued, pay little attention to secondary-school credentials, and youths not bound for college have scant incentive to excel in school. In comparison with other countries and with what schools once accomplished, U.S. secondary education appears to be in decline. The decline, moreover, exists not because we are spending too little, but because, it is claimed, less is being bought for more.(1)
At the same time, the technologies of our day, particularly computer-based ones, are demanding more of workers. To many, the combination of the "dumbing down" of secondary schools and a technology that is ability-biased in its rewards have increased the returns to higher education, innate ability, and social background.(2) Public secondary schools, it is often asserted, respond poorly to incentives, and thus the situation will not improve until basic institutions are changed.
Other periods also have witnessed large advances in technology and increasing demands on the educational system. Did the wage structure widen with each wave of technological progress? And if technological change in the past increased the premium to skill, as it appears to be doing today, did U.S. educational institutions meet the challenges of technological booms? Immigration is a contentious issue today, in part because of rising inequality. But immigration around the turn of this century was considerably greater and placed enormous strains on the nation's public-school resources. What was the public-sector's response during the period of mass European migration (1900 to 1914)? Rising inequality is a more serious issue today because productivity slowed beginning in 1973, and concern is often expressed that lagging U.S. productivity mirrors the increasing failures of its education system. How did educational advances of the past affect economic growth? Our joint and separate research over the past several years has addressed these questions and the related subjects of economic inequality, education, and technological change.
The Rise of the American High School and Its Economic Consequences
Most of the increase (about 70 percent) in the educational attainment of Americans between 1900 and 1970 occurred at the secondary-school level and much of the advance was accomplished between 1910 and 1940, when the high-school graduation rate rose from less than 10 percent to 50 percent. Because of the importance of the high-school expansion to educational change in the twentieth century, we began our project with an exploration of the rise of the American high school and the reasons for its extraordinary and unprecedented increase.(3) Our project is the first quantitative study tracking the expansion of secondary schooling in the United States and has produced a major panel data set of states (1910 to 1970s) and cities (1920s and 1930s).
Secondary (or preparatory) schools had existed in the United States, and much of Europe, well before their expansion in the early twentieth century, but they were institutions that primarily trained youths for college. In 1910, for example, half of public high-school graduates in the United States continued their education, a percentage that was higher than it would be until the 1970s. College enrollments after 1910 did not fall or even slow down in their rate of increase. Rather, youths began to enter high schools to obtain an education that would lead directly to employment, not college. The economy had begun producing white-collar jobs that demanded formal education in excess of that provided by the common schools but considerably less than that...
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