Human Capital Deepening in Nineteenth-Century America
Claudia Goldin and Larry Katz think about how America became the most formal skill- and education-intensive economy in the world:
The "Virtues" of the Past: Education in the First Hundred Years of the New Republic: By the mid-nineteenth century school enrollment rates in the United States exceeded those of any other nation in the world and by the early twentieth century the United States had accomplished mass education at all levels. No country was able to close the gap until the last quarter of the twentieth century. For much of its history U.S. education was spurred by a set of 'virtues,' the most important of which were public provision by small fiscally independent districts, public funding, secular control, gender neutrality, open access, a forgiving system, and an academic curriculum. The outcomes of the virtues were an enormous diffusion of educational institutions and the early spread of mass education. America borrowed its educational institutions from Europe but added to them in ways that served to enhance competition and openness. The virtues of long ago need not be the virtues of today, and they also need not have been virtuous in all places and at all times in the past. In this essay we explore the historical origins of these virtues and find that almost all were in place in the period before the American Civil War...
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Capital Deepening in Mid-Nineteenth Century America
Atack, Bateman, and Margo fill in a hole in our understanding of how America became the most capital-intensive economy in the world:
Capital Deepening in American Manufacturing, 1850-1880: We use establishment-level data to study capital deepening -- increases in the capital-output ratio -- in American manufacturing from 1850 to 1880. In nominal terms, the aggregate capital-output ratio in our samples rose by 30 percent from 1850 to 1880. Growth in real terms was considerably greater -- 70 percent -- because prices of capital goods declined relative to output prices. Cross-sectional regressions suggest that capital deepening was especially importnat in the larger firms and was positively associated with the diffusion of steam-powered machinery. However, even after accounting for shifts over time in such factors, much of the capital deepening remains to be explained...
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