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Human Capital in History: The American Record

Editor(s):Boustan, Leah Platt
Frydman, Carola
Margo, Robert A.
Reviewer(s):Rosenbloom, Joshua L.

Published by EH.Net (October 2015)

Leah Platt Boustan, Carola Frydman, and Robert A. Margo, editors, Human Capital in History: The American Record. Chicago: University of Chicago Press, 2014. xi + 406 pp. $110 (cloth), ISBN: 978-0-226-16389-5.

Reviewed for EH.Net by Joshua L. Rosenbloom, Department of Economics, Iowa State University.

Through her own scholarship, the many doctoral students she has supervised, and her leadership of the National Bureau of Economic Research’s (NBER) Development of the American Economy Program, Claudia Goldin has played an outsized role in shaping the practice, standards, and approaches of the economic history profession today.  Having been honored as President of both the Economic History Association and the American Economic Association, Goldin has also done a great deal to integrate historical approaches into economics, while promoting careful attention to economics in historical work.  The essays collected in this volume, which were first presented at an NBER conference in 2012, represent a fitting tribute to Goldin’s contributions to scholarship in historical economics.

The book contains ten substantive chapters sandwiched between an introduction by the editors and a touching and very personal appreciation of Goldin by Stanley Engerman.  The introduction by the editors elaborates the unifying theme of the volume — the centrality of human capital to understanding American economic development — and highlights some of the many ways that Goldin’s scholarship, alone and with various collaborators, has contributed to our understanding of this historical record.

Given the scope of topics encompassed within the themes of this volume it is not possible to do justice to the many insights they yield.  Rather, this review will seek to touch on some of the highlights of the volume as I see them.  Broadly speaking the contributions in the book fall into two groups: the first four chapters address topics related to the supply of and demand for skilled labor, while the remaining six chapters focus on aspects of women’s labor force participation and related issues, such as fertility and family formation.

Among the first four chapters, the first, written by Lawrence F. Katz and Robert A. Margo, is likely to have the greatest impact on our understanding of American economic development.  In this chapter, the authors revisit the topic of capital-skill complementarities, which was the theme of Goldin and Katz’s influential 2008 book, The Race between Education and Technology.  Drawing on a vast array of data sources, encompassing IPUMS samples from the population census, establishment-level data from the manuscripts of the census of manufactures, and newly collected archival wage data, they argue that the widely held view of nineteenth-century technological advance as de-skilling is incorrect.  Rather, Katz and Margo argue, the nineteenth-century experience more nearly resembles that of recent decades, when technological change caused a hollowing out of the workforce, reducing the demand for artisanal skills while increasing demand for both white-collar workers and less skilled operatives.

It is hardly a criticism to say that the next three chapters take a narrower focus.  These chapters offer valuable empirical insights and illustrate the creative use of a variety of different data sets, but the insights they yield are more limited, helping to fill in details rather than recast our understanding of events. In chapter 2, Nora Gordon investigates the effects of income inequality on high school graduation rates. This chapter offers considerable insight into the data challenges involved in addressing this question, but these challenges make it hard to draw firm conclusions in the end.  Ilyana Kuziemko and Joseph Ferrie (chapter 3) employ IPUMS data to explore the determinants of immigrant assimilation, in the twentieth-century. They show that while immigrant families with young children in the period 1900-1930 assimilated more quickly than those without young children, the opposite was true in the period 1970-2010.  They conjecture that in the earlier period, children contributed to parental learning about the surrounding culture, but that in the latter period, parents “leaned on” their children to navigate a foreign culture for them. In chapter 4, Dora Costa, Hoyt Bleakly and Adriana Lleras-Muney investigate the relationship between child health and investments in schooling.  Using a variety of micro-data sets they show that the relationship between child health and schooling was weaker in the nineteenth century than it became in the twentieth century, a result they attribute to the shifting value of physical strength and education in the labor market.

Among the chapters focusing on female labor force participation and family issues two chapters stand out for posing important questions and yielding new insights.  The first, written by Shelly Lundberg and Robert A. Pollak (chapter 7) explores the breakdown of the relationship between marriage and childbearing that has characterized the period since 1950.  Relying on charts and a few selected tables to illustrate key trends, Lundberg and Pollak advance a compelling reinterpretation of the economics of marriage that allows for cohabitation and offers an explanation for the divergence of patterns of marriage and childbearing associated with differences in education and income classes.  The second, by Claudia Goldin (chapter 9), develops a new account of male-female occupational segregation premised on the notion that female entry into an occupation may signal a reduction in occupational prestige.  After developing this “pollution” model, Goldin takes it “into the real world,” using a novel data set derived from two 1940 U.S. Department of Labor, Women’s Bureau Studies that link information on employers’ policies and the characteristics of office workers.

The other chapters in this section of the book again make valuable contributions, but their scope and implications are more limited.  Claudia Ollivetti (chapter 5) uses international data to show that the U-shaped pattern of female labor force participation in the United States documented in Goldin’s Understanding the Gender Gap (1990) appears to be a much more general phenomenon.  Leah Platt Boustan and William Collins (chapter 6) offer a number of fresh insights about racial differences in female labor force participation in the twentieth century.  Drawing on data from the IPUMS and the NLS they argue that the persistence of racial differences reflects in part cultural differences that are transmitted by childhood experience, so that daughters of working mothers are more likely to combine work and childrearing themselves.  Martha Bailey, Melanie Guldi and Brad Hershbein (chapter 8) offer new details of the evolution of fertility in the United States, but their effort to motivate these measurements as an answer to the question whether there has been a second demographic transition seems somewhat forced.  Edward Glaeser and Yueran Ma’s effort to account for the emergence of gender stereotypes and their role in creating discriminatory beliefs (chapter 10) is intriguing, but to this reader appeared to be something of an outlier in this volume.  In comparison to the other contributions, the Glaeser-Ma chapter is largely theory driven and does not make much effort to integrate this theory with historical reality.

Overall, the quality of the scholarship in this volume is impressive.  Many of the chapters deploy new data or use more familiar sources in new and novel ways.  The care with which the data are handled is exemplary and the linkage between economic reasoning and historical investigation is strong and mutually reinforcing.  While the novelty and historical insight offered by the different contributions is uneven, a number of chapters merit wide readership and almost all will be important references for future research.

Joshua L. Rosenbloom is Professor of Economics and Department Chair at Iowa State University.  He is also a Research Associate of the National Bureau of Economic Research, Cambridge, MA. His recent publications include “Labor-Market Regimes in U.S. Economic History,” (co-authored with William A. Sundstrom) in Paul W. Rhode, Joshua L. Rosenbloom and David F. Weiman, eds. Economic Evolution and Revolutions in Historical Time (Stanford, CA: Stanford University Press, 2011).

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Subject(s):Education and Human Resource Development
Historical Demography, including Migration
Labor and Employment History
Social and Cultural History, including Race, Ethnicity and Gender
Geographic Area(s):North America
Time Period(s):19th Century
20th Century: Pre WWII
20th Century: WWII and post-WWII