The Return to Education in the Mid-20th Century: Evidence from Twins

Abstract

What was the return to education in the US at mid-century? In 1940, the correlation between years of schooling and earnings was relatively low. In this paper, we estimate the causal return to schooling in 1940, constructing a large linked sample of twin brothers to account for differences in unobserved ability and family background. We find that each additional year of schooling increased labor earnings by approximately 4%, about half the return found for more recent cohorts in contemporary twins studies. These returns were evident both within and across occupations and were higher for sons from lower SES families.

The 1918 Influenza Pandemic and Its Lessons for COVID-19

“…39 Older students may have decided not to return once schools reopened, as was the case during the widespread U.S. polio epidemic of 1916 (Meyers and Thomasson, 2017). But, those that were of schooling age during the pandemic would ultimately grow up to enter a labor market where the returns to education were by some estimates lower than today (Feigenbaum and Tan, Forthcoming;Goldin and Katz, 2009), and so dropping out of school may not have affected long-run occupational standing. Moreover, the returns to education during this period appear to be driven by schooling at lower grade levels (Clay, Lingwall and Stephens Jr, 2016), and younger children probably didn't drop out because of temporary school closures.…”

Automated Linking of Historical Data

“…These longitudinal datasets offer new evidence on questions such as the selection of immigrants (Abramitzky et al 2012, Kosack and Ward 2014, how immigrants integrate into the economy and society (Abramitzky et al 2014, Fouka 2019, Pérez 2017, how intergenerational mobility varied across groups and over time (Parman 2011, Ferrie and Long 2013, Feigenbaum 2015, 2018, Modalsli 2017, Collins and Wanamaker 2017, the long-run effects of governmental programs and historical events (Aizer et al 2016, Bleakley and Ferrie 2016, Salisbury 2014, Parman 2015, Eli and Salisbury 2016, Eriksson 2019), the geographic and economic mobility of African Americans (Collins and Wanamaker 2014, Hornbeck and Naidu 2014, and the return to human capital (Feigenbaum and Tan 2019). 1 Linking historical data, however, introduces particular challenges.…”

Pandemic Fatigue: A Global Challenge

“…39 Older students may have decided not to return once schools reopened, as was the case during the widespread U.S. polio epidemic of 1916 (Meyers and Thomasson, 2017). But, those that were of schooling age during the pandemic would ultimately grow up to enter a labor market where the returns to education were by some estimates lower than today (Feigenbaum and Tan, Forthcoming;Goldin and Katz, 2009), and so dropping out of school may not have affected long-run occupational standing. Moreover, the returns to education during this period appear to be driven by schooling at lower grade levels (Clay, Lingwall and Stephens Jr, 2016), and younger children probably didn't drop out because of temporary school closures.…”