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

Published online by Cambridge University Press:  30 September 2020

James J. Feigenbaum
Affiliation:
Assistant Professor, Department of Economics, Boston University, 270 Bay State Road, Boston, MA, 02215. E-mail: jamesf@bu.edu.
Hui Ren Tan
Affiliation:
Assistant Professor, Department of Economics, National University of Singapore, 1 Arts Link, Singapore 117570. E-mail: huiren@nus.edu.sg.

Abstract

What was the return to education in the United States at mid-century? In 1940, the correlation between years of schooling and earnings was relatively low. In this article, 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 percent, about half the return found for more recent cohorts in twins studies. These returns were evident both within and across occupations and were higher for sons from lower socio-economic status families.

Type
Article
Copyright
© The Economic History Association 2020

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Footnotes

For detailed feedback and helpful suggestions, we thank Ran Abramitzky, Michael Andrews, Orley Ashenfelter, Brian Beach, Kevin Lang, Erika Lee, Bob Margo, Ross Mattheis, Christopher Muller, Ee Cheng Ong, Jessica Pan, Hanna Schwank, Kelvin Seah, and Marybeth Train. Thomas Pearson and Erika Lee provided excellent research assistance. All errors are our own.

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