Showing papers by "Lawrence F. Katz published in 1998"

Computing Inequality: Have Computers Changed the Labor Market?

Abstract: This paper examines the effect of skill-biased technological change as measured by computerization on the recent widening of U. S. educational wage differentials. An analysis of aggregate changes in the relative supplies and wages of workers by education from 1940 to 1996 indicates strong and persistent growth in relative demand favoring college graduates. Rapid skill upgrading within detailed industries accounts for most of the growth in the relative demand for college workers, particularly since 1970. Analyses of four data sets indicate that the rate of skill upgrading has been greater in more computer-intensive industries.

The Origins of Technology-Skill Complementarity

Abstract: Current concern with the impact of new technologies on the wage structure motivates this study. We offer evidence that technology-skill and capital-skill (relative) complementarities existed in manufacturing early in this century and were related to the adoption of electric motors and particular production methods. Industries, from 1909 to 1929, with more capital per worker and a greater proportion of motive energy coming from purchased electricity employed relatively more educated blue-collar workers in 1940 and paid their production workers substantially more. We also find a strong positive association between changes in capital intensity and the nonproduction worker wage bill from 1909–1919 implying capital-skill complementarity as large as in recent years.

Human Capital and Social Capital: The Rise of Secondary Schooling in America, 1910 to 1940

Abstract: The United States led all other nations in the development of universal and publicly-funded secondary school education and much of the growth occurred from 1910 to 1940 The focus here is on the reasons for the high school movement' in American generally and why it occurred so early and swiftly in America's heartland - a region we dub the 'education belt' At the center of this belt' was the state of Iowa and we use information from the unique 1915 Iowa State Census to explore the factors, at both the county and individual levels, that propelled states like Iowa to embrace secondary school education very early Iowa's small towns, as well as those across the nation, were the loci of the high school movement In an analysis at the national level, we find that greater homogeneity of income or wealth, a higher level of wealth, greater community stability, and more ethnic and religious homogeneity fostered high school expansion from 1910 to 1930 The pecuniary returns to secondary school education were high - on the order of 12 percent per year in 1914 - providing substantial private incentives for high school attendance State-level measures of social capital today are strongly correlated with economic and schooling variables from 1900 to 1930 The social capital assembled locally in the early part of the century, which apparently fueled part of the high school movement, continues to contribute to human capital formation

The Origins of Technology-Skill Complementarity

Abstract: Current concern with relationships among particular technologies, capital, and the wage structure motivates this study of the origins of technology-skill complementarity in manufacturing We offer evidence of the existence of technology-skill and capital-skill (relative) complementarities from 1909 to 1929, and suggest that they were associated with continuous-process and batch methods and the adoption of electric motors Industries that used more capital per worker and a greater proportion of their horsepower in the form of purchased electricity employed relatively more educated blue-collar workers in 1940 and paid their blue-collar workers substantially more from 1909 to 1929 We also infer capital-skill complementarity using the wage-bill for non-production workers and find that the relationship was as large from 1909-19 as it has been recently Finally, we link our findings to those on the high-school movement (1910 to 1940) The rapid increase in the supply of skills from 1910 to 1940 may have prevented rising inequality with technological change

The Origins of State-Level Differences in the Public Provision of Higher Education: 1890-1940

Abstract: In recent years, the publicly controlled sector has accounted for about 67 percent of all students in four-year institutions of higher education, whereas in 1897 the figure was only 22 percent.' The transition was early and swift, however, for on the eve of the United States' entry into World War II almost 50 percent of all students were in public-sector institutions. Thus, by 1940 more than 60 percent of the century-long expansion in public-sector enrollments (four-year) had already taken place. The relative rise of public higher education occurred decades before the rapid postwar acceleration of college enrollments and is apparent even without including community colleges. Differences across states in public-sector enrollments and in public support for higher education were considerable in the past but narrowed markedly after 1950. In 1929, enrollments in publicly controlled institutions averaged 6 per 1,000 residents in the Mountain and Pacific states, but only 0.8 per 1,000 residents in New England. State and local spending on higher education was $2,057 per 1,000 inhabitants in the Mountain states, but just $458 per 1,000 inhabitants in New England. In 1900 the cross-state coefficient of variation of public-sector enrollments per capita was 1.14, but this fell to 0.60 by 1929 and stands today at about 0.21. The convergence for the private-sector figure was far less (0.88 in 1900 and 0.70 in 1994). Changes in the cross-state variation in spending per capita and in publicsector tuition are similar. Despite the potent forces of market integration (Caroline Hoxby, 1997), many higher-education indicators exhibit substantial long-term persistence. A strong relationship exists at the state level between privatesector enrollments per capita today and those in 1900 (p = 0.64). A strong correlation (p = 0.46) also exists between public highereducation spending per capita today and the year of statehood (see also John M. Quigley and Daniel L. Rubinfeld, 1993). States admitted earlier have stronger private sectors and less well-supported public sectors, and the relationship is more complex than a simple difference between the Northeast and the Far West. Both the public and private highereducation sectors evolved in the 1890-1940 period. Fundamental changes in the creation and diffusion of knowledge, such as the specialization of disciplines, the professionalization of many occupations, the secularization of higher education, the increased role of research, and the ascent of the "university" form, altered the industrial structure of higher education. These changes increased the scale and scope of institutions and gave a productivity advantage to certain public-sector institutions. t Discussants: Robert P. Inman, University of Pennsylvania; Christopher S. Jencks, Harvard University. * Department of Economics, Harvard University, Cambridge, MA 02138. We acknowledge generous support from the National Science Foundation for our research and from the Russell Sage Foundation for our 1997-1998 academic leave. We thank Cheryl Seleski and Kerry Woodward for their superb assistance in the coding of the higher-education data set. Conversations with Caroline Minter Hoxby, James Poterba, and Marcus Stanley have helped clarify some of the ideas in this paper. We thank them all. ' In the interest of brevity, all citations for recent data are U.S. Department of Education (1996) and "today" means 1994. For all other data sources, see Goldin and Katz ( 1998). The share of total enrollments accounted for by publicly controlled institutions in 1994 was 78 percent when two-year institutions are also included. The term "public sector" in this paper means "publicly controlled sector."

The Shaping of Higher Education: The Formative Years in the United States, 1890 to 1940

Abstract: The American university was shaped in a formative period from 1890 to 1940 long before the rise of federal funding, the G.I. Bill, and mass higher education. Both the scale and scope of institutions of higher education were greatly increased, the research university blossomed, states vastly increased their funding of higher education, and the public sector greatly expanded relative to the private sector. Independent professional institutions declined, as did theological institutes and denominational colleges in general. Increases in the scale and scope of institutions of higher education were generated by exogenous changes in the that affected the professions generally and that of the clergy in particular. The increase in the share of students in the public sector may also have been prompted by these exogenous changes for they gave advantages to institutions, such as those in the public sector, that had research facilities, reputation, and a long purse. The high school movement, which swept parts of the country from 1910 to 1940, brought students from less privileged backgrounds to college and thus also buoyed enrollments in the public sector. States differed widely in their funding of higher education per capita and we find that greater generosity in 1929 was positively associated with later statehood, lower private college enrollments in 1900, greater shares of employment in mining and manufacturing, higher income, and a proxy for greater and more equally distributed wealth.

A Distinctive System: Origins and Impact of U.S. Unemployment Compensation

Abstract: Unemployment compensation in the United States was signed into law in August 1935 as part of the omnibus Social Security Act. Drafted in a period of uncertainty and economic distress, the portions that dealt with unemployment insurance were crafted to achieve a multiplicity of goals, among them passage of the act and a guarantee of its constitutionality. Along with the federal-state structure went experience-rating and characteristics added by the states, such as the limitation on duration of benefits. The U.S. unemployment compensation system is distinctive among countries by virtue of its federal-state structure, experience-rating, and limitation on benefits. We contend that these features were products of the times, reflecting expediency more than efficiency, and thus that UI would have been different had it been passed in another decade. But how different is the UI system in the United States because of these features, and how have they affected the U.S. labor market? We present evidence showing that more seasonality in manufacturing employment in 1909-29 is related to higher UI benefits from 1947 to 1969, if a state's manufacturing employment share is below the national mean. Lobbying activities of seasonal industries appear important in the evolution of the parameters. We also present suggestive evidence on the relationship between declining seasonality and experience-rating.

Reflections on US Labour Market Performance

Abstract: The United States has produced rapid employment growth (almost entirely in the private sector) and an impressive unemployment record relative to most other advanced nations over the past two decades. The contrast of strong US labour market performance to persistent high unemployment throughout much of the OECD has been particularly striking in the 1990s. From 1990 to the fourth quarter of 1997, total employment in the US increased by 10.9 per cent, and the US unemployment rate declined from 5.5 per cent to 4.7 per cent. Over the same period in OECD Europe, total employment actually declined by 1.7 per cent and the unemployment rate increased from 8.0 per cent to 10.2 per cent (OECD 1998, pp. 40–41). Furthermore, the United States has combined strong employment growth with low and declining inflation in the 1990s.

Human Capital and Social Capital: The Rise of Secondary Schooling in America, 1910 to 1940

Abstract: The United States led all other nations in the development of universal and publicly-funded secondary school education and much of the growth occurred from 1910 to 1940. The focus here is on the reasons for the high school movement' in American generally and why it occurred so early and swiftly in America's heartland - a region we dub the 'education belt.' At the center of this belt' was the state of Iowa and we use information from the unique 1915 Iowa State Census to explore the factors, at both the county and individual levels, that propelled states like Iowa to embrace secondary school education very early. Iowa's small towns, as well as those across the nation, were the loci of the high school movement. In an analysis at the national level, we find that greater homogeneity of income or wealth, a higher level of wealth, greater community stability, and more ethnic and religious homogeneity fostered high school expansion from 1910 to 1930. The pecuniary returns to secondary school education were high - on the order of 12 percent per year in 1914 - providing substantial private incentives for high school attendance. State-level measures of social capital today are strongly correlated with economic and schooling variables from 1900 to 1930. The social capital assembled locally in the early part of the century, which apparently fueled part of the high school movement, continues to contribute to human capital formation.

Human Capital and Social Capital: The Rise of Secondary Schooling in America, 1910–1940

Abstract: The United States led all other nations in the development of universal and publicly-funded secondary school education and much of the growth occurred from 1910 to 1940. The focus here is on the reasons for the high school movement' in American generally and why it occurred so early and swiftly in America's heartland - a region we dub the 'education belt.' At the center of this belt' was the state of Iowa and we use information from the unique 1915 Iowa State Census to explore the factors, at both the county and individual levels, that propelled states like Iowa to embrace secondary school education very early. Iowa's small towns, as well as those across the nation, were the loci of the high school movement. In an analysis at the national level, we find that greater homogeneity of income or wealth, a higher level of wealth, greater community stability, and more ethnic and religious homogeneity fostered high school expansion from 1910 to 1930. The pecuniary returns to secondary school education were high - on the order of 12 percent per year in 1914 - providing substantial private incentives for high school attendance. State-level measures of social capital today are strongly correlated with economic and schooling variables from 1900 to 1930. The social capital assembled locally in the early part of the century, which apparently fueled part of the high school movement, continues to contribute to human capital formation.

The Shaping of Higher Education: The Formative Years in the United States, 1890 to 1940

Abstract: The American university was shaped in a formative period from 1890 to 1940 long before the rise of federal funding, the G.I. Bill, and mass higher education. Both the scale and scope of institutions of higher education were greatly increased, the research university blossomed, states vastly increased their funding of higher education, and the public sector greatly expanded relative to the private sector. Independent professional institutions declined, as did theological institutes and denominational colleges in general. Increases in the scale and scope of institutions of higher education were generated by exogenous changes in the that affected the professions generally and that of the clergy in particular. The increase in the share of students in the public sector may also have been prompted by these exogenous changes for they gave advantages to institutions, such as those in the public sector, that had research facilities, reputation, and a long purse. The high school movement, which swept parts of the country from 1910 to 1940, brought students from less privileged backgrounds to college and thus also buoyed enrollments in the public sector. States differed widely in their funding of higher education per capita and we find that greater generosity in 1929 was positively associated with later statehood, lower private college enrollments in 1900, greater shares of employment in mining and manufacturing, higher income, and a proxy for greater and more equally distributed wealth.

Reflections on US Labour Market Performance

Abstract: The United States has produced rapid employment growth (almost entirely in the private sector) and an impressive unemployment record relative to most other advanced nations over the past two decades. The contrast of strong US labour market performance to persistent high unemployment throughout much of the OECD has been particularly striking in the 1990s. From 1990 to the fourth quarter of 1997, total employment in the US increased by 10.9 per cent, and the US unemployment rate declined from 5.5 per cent to 4.7 per cent. Over the same period in OECD Europe, total employment actually declined by 1.7 per cent and the unemployment rate increased from 8.0 per cent to 10.2 per cent (OECD 1998, pp. 40–41). Furthermore, the United States has combined strong employment growth with low and declining inflation in the 1990s.