The History of Wage Inequality in America, 1920 to 1970

Robert Margo

Macroeconomics from University Library of Munich, Germany

Abstract: In recent decades the United States has experienced a pronounced widening of its wage structure. For the most part, analysis of the recent rise in wage inequality has taken place with the benefits of hindsight—that is, without placing recent changes in the wage structure in historical context. This paper presents such an historical context, by summarizing what is currently known about the evolution of the wage structure from 1820 to 1970. I argue that this evolution was characterized by both episodic change and secular trends. Perhaps the most important secular trend is a long-term rise in the returns to educated labor beginning before the Civil War and continuing until the turn of the 20th century, followed by a decline over the 1900 to 1940 period. In the 1940s substantial further erosion in wage differentials took place, primarily as a consequence of various government policies and increases in the relative demand for less-skilled labor associated with World War II. Although wage inequality today is high by post-World War II standards, it is not particularly high when measured against the pre-World War II experience. As far as government policy is concerned, there is compelling historical evidence that long-term expansion of educational opportunity has been a potent force in narrowing wage differentials.

JEL-codes: E (search for similar items in EconPapers)
Pages: 38 pages
Date: 2000-10-11
New Economics Papers: this item is included in nep-lab
Note: Type of Document - Adobe Acrobat PDF; prepared on IBM PC; to print on PostScript; pages: 38; figures: included
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://econwpa.ub.uni-muenchen.de/econ-wp/mac/papers/0004/0004035.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpma:0004035

Access Statistics for this paper

More papers in Macroeconomics from University Library of Munich, Germany
Bibliographic data for series maintained by EconWPA ( this e-mail address is bad, please contact ).