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Returns to education in the early 20th century.

How valuable was an additional year of education early in this century? In a new study that uses data from the Iowa State Census of 1915, Claudia Goldin and Lawrence F. Katz found that there were substantial returns to an additional year of high school or college in 1915.

Goldin and Katz presented their findings in Working Paper 7217 from the National Bureau of Economic Research, "Education and Income in the Early 20th Century: Evidence from the Prairies." Their study is unique because they estimate returns to education before 1940 with a large sample of both men and women who were employed in various sectors and occupations. The 1940 U.S. Census of Population was the first national census to ask about education and earnings, so there is limited information available for earlier years.

For their analysis, Goldin and Katz utilized a sample of nearly 60,000 individuals from the Iowa State Census of 1915 (a 1-in-40 sample). The State Census collected information on age, sex, educational attainment, occupation, and income, as well as other items. Iowans in 1915 were apparently ahead of their time in educational attainment--they had the same average years of education (among 25-to-59-year olds) that the Nation had in 1940.

Goldin and Katz's analysis showed sizable returns to education for both men and women. An additional year of high school or college increased income of men by about 10 percent in Iowa in 1915, according to their estimates. For young unmarried women, the return to a year of high school was also 10 percent, and for this group, the return to a year of college was 15 percent.
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Publication:Monthly Labor Review
Article Type:Brief Article
Geographic Code:1USA
Date:Oct 1, 1999
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