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

James Feigenbaum and Hui Ren Tan

No 26407, NBER Working Papers from National Bureau of Economic Research, Inc

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, less than it had been in 1915 or than it would be in later decades. 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. Though imperfect, the twins identification strategy allows us to compare the return to education to recent studies implemented similarly. We find that the return to education was relatively low in 1940, with each additional year of schooling increasing labor earnings by approximately 4%. Returns to education were evident both within and across occupations and were higher for sons born to lower SES families.

JEL-codes: J2 J3 N3 N32 (search for similar items in EconPapers)
Date: 2019-10
New Economics Papers: this item is included in nep-his and nep-lma
Note: DAE LS
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