Human capital and social capital: The rise of secondary schooling in America, 1910-1940

Journal of Interdisciplinary History

Volumn 29, Issue 4, 1999, Pages 683-723

  Goldin, Claudia ^a,b   Katz, Lawrence F ^a,b  

^a HARVARD UNIVERSITY   (United States)

^b NATIONAL BUREAU OF ECONOMIC RESEARCH   (United States)

Author keywords

[No Author keywords available]

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EID: 33748351169     PISSN: 00221953     EISSN: None     Source Type: Journal    
DOI: 10.1162/002219599551868     Document Type: Review

References (69)

1. There are many notions of social capital. The one that we employ is similar to that in James S. Coleman, "Social Capital in the Creation of Human Capital," American Journal of Sociology, Supplement to XCIV (1988), S95-S120. Like physical capital and human capital, social capital is a stock of productive matter that can be called upon to facilitate an action. But unlike human capital, social capital does not belong to, or inhere in, or reside in any one individual. Rather, it is part of a community, a network, a neighborhood, a country, a clan, or a family. It is more public than private; it is more social than individual. At times, it is more intangible than tangible because it exists in the relations among individuals.
2. Martin Trow, "The Second Transformation of American Secondary Education," International Journal of Comparative Sociology, II (1961), 144-166, places the "high school movement" in historical perspective.
3. For sources to the various data cited on secondary school education, see Goldin, Appendix to "How America Graduated From High School: An Exploratory Study, 1910 to 1960," National Bureau of Economic Research-Development of the American Economy working paper 57 (Cambridge, Mass., 1994);
4. Goldin, idem, "America's Graduation from High School: The Evolution and Spread of Secondary Schools in the Twentieth Century," Journal of Economic History, LVIII (1998), 345-374.
5. For comparative data, see Goldin and Katz, "Why the United States Led in Education: Lessons from Secondary School Expansion, 1910 to 1940," National Bureau of Economic Research (NBER) working paper 6144 (Cambridge, Mass., 1997);
6. Fritz K. Ringer, Education and Society in Modern Europe (Bloomington, 1979).
7. On the relative cost of primary and secondary education, see, for example, U.S. Bureau of Education, Biennial Survey of Education, 1920/22 (Washington, D.C., 1924), 5. "In 1918 the average cost in the United States per elementary school pupil enrolled was $31.05; per high-school pupil enrolled, $84.48." The difference would have been less if weighted by states, not individuals, because states with the most support to education would have had more students in high school.
8. Not all of the 130,000 school "attendance" districts were fully independent "fiscal districts" with control over their property taxes and spending. Iowa school districts appear to have had fiscal independence. Although the counties collected school district taxes and arranged for the exchange of "tuition" payments among the state's school districts, the county appears to have been simply the fiscal agent for the districts. The districts seem to have set tax and tuition rates, within the bounds of the various state laws and regulations. On the number of school districts, see U.S. Office of Education, Biennial Survey of Education, 1930/32 (Washington, D.C., 1935);
9. U.S. Bureau of the Census, Historical Statistics of the United States: Colonial Times to 1970 (Washington, D.C., 1975), series H 412.
10. For data on the share of various levels of government in school finance, see U.S. Bureau of Education, Biennial Survey of Education, 1924/26 (Washington, D.C., 1928), Table 18, 593.
11. On the role of secondary-school advances in increasing the stock of education, see Goldin, "America's Graduation from High School," Table 1, 346.
12. The World War II G.I. Bill of Rights is the subject of Keith W. Olson, The G.I. Bill, the Veterans, and the Colleges (Lexington, Ky., 1974) which, on the basis of a simple extrapolation, concludes that the bill had a negligible net impact on the number of men who went to college.
13. Marcus Stanley, "The Impact of the World War II G.I. Bill on the College Graduation of Men," unpub. paper, Harvard University (Cambridge, Mass., 1997), using more sophisticated tools and cohort-specific data, finds that the bill increased the numbers of men graduating from college in the affected cohorts (born 1921 to 1927). Other possible effects of the G.I. Bill, for example the distribution of college students across universities, have not yet been examined thoroughly.
14. On the use of high school graduates by industry, see Goldin and Katz, "The Origins of Technology-Skill Complementarity," Quarterly Journal of Economics, CXIII (1998), 693-732.
15. For an analysis of public expenditures on higher education per capita, see Goldin and Katz, "The Origins of State-Level Differences in the Provision of Higher Education: 1890 to 1940,", American Economic Review, LXXXVIII (1998), 303-308.
16. See also Fred J. Kelly and John H. McNeely, The State and Higher Education: Phases of Their Relationship (New York, 1933). 257. Of the top fourteen states in 1930 by "receipts from state, county, or city of publicly supported higher education per [non-black] inhabitant 21 years of age and over," all but six are in the Pacific or West North Central regions and four of the six are in the Mountain region. One of the remaining two is South Carolina, because Kelly and McNeely exclude blacks from the denominator. The other is Oklahoma.
17. See the lengthy discussion in U.S. Bureau of Education, Biennial Survey, 1920/22, 1-9, on the increase in educational expenditures directly following World War I.
18. Our contributions to the literature on high schools include Goldin, "America's Graduation from High School";
19. Goldin, idem and Katz, "Why the United States Led."
20. Among the most-cited volumes are Edward A. Krug, The Shaping of the American High School: 1880-1920 (Madison, 1964);
21. Edward A. Krug, idem, The Shaping of the American High School: 1920-1941 (Madison, 1972), II;
22. William J. Reese, The Origins of the American High School (New Haven, 1995). In the current article, we pay less attention to the special subject of secondary schooling in America's big cities than we have done in previous work.
23. These issues have been the focus of many fine works, among them David Tyack, The One Best System (Cambridge, Mass., 1974);
24. David F. Labaree, The Making of an American High School: The Credentials Market and the Central High School of Philadelphia, 1838-1939 (New Haven, 1988);
25. Joel Perlmann, Ethnic Differences: Schooling and Social Structure among the Irish, Italians, Jews, and Blacks in an American City, 1880-1935 (New York, 1988).
26. For data on the numbers of secondary-school graduates continuing to higher education, see Goldin, "America's Graduation from High School," Table 2, 351.
27. In this manner, the question we ask is similar to that in work on the diffusion of technological processes. See, for example, Zvi Griliches, "Hybrid Corn: An Exploration in the Economics of Technological Change," Econometrica, XXVI (1958), 501-522.
28. Michael B. Katz, The Irony of Early School Reform: Educational Innovation in Mid-Nineteenth Century Massachusetts (Cambridge, Mass., 1968),
29. and Maris A. Vinovskis, The Origins of Public High Schools: A Reexamination of the Beverly High School Controversy (Madison, 1985), have different interpretations of the opposition of one community to the building of a high school. Katz sees the opposition based on class, whereas Vinovskis interprets it more pragmatically as a matter of which individuals lived closer to the proposed school. Early controversy about state and local financing of high schools is also taken up in Reese, Origins.
30. See also Isaac Leon Kandel, History of Secondary Education: A Study in the Development of Liberal Education (Boston, 1930), particularly on the important Kalamazoo case of 1874, after which states no longer questioned whether localities had the authority to tax citizens to establish a high school. Kalamazoo thereby served to legalize the spread of the public high school in America by attaching its importance to that of the common school.
31. For a discussion of the establishment of early high schools in Iowa to produce teachers for the common school system, see Clarence Ray Aurner, History of Education in Iowa (Iowa City, 1915), I, III. Although the early high schools charged tuition, through the "rate bill," individuals who promised to teach received a tuition waiver. As early as 1858, Iowa offered scholarships and stipends to students in the top half of their high school class, provided that they became teachers and served for the length of time that they had received the scholarship (I, 52-53).
32. For data on the wage structure by occupation, see Goldin and Katz, "The Decline of Noncompeting Groups: Changes in the Premium to Education, 1890 to 1940," NBER working paper 5202 (Cambridge, Mass., 1995).
33. State of Iowa, Iowa School Report, 1911/12 (Des Moines, 1912), 12.
34. In Willa Cather's novel, My Antonia (Boston, 1918), which takes place in south-central Nebraska in the 1890s, Jim Burden's grandparents retire from farming and move to town so that he can attend the local high school.
35. For a similar argument see Gary S. Becker and Kevin M. Murphy, "The Family and the State," Journal of Law and Economics, XXXI (1988), 1-18.
36. On the human capital model, see Becker, Human Capital (New York, 1964).
37. By "closure" Coleman means the results of any mechanism that links social relationships to facilitate the drawing on social capital. For example, assume that school children do better when their parents take an interest in them and that parents are "shamed" when others see that they do not do homework with their children. Closure may be facilitated when parents get together and discuss how to help their children with homework. The parental meeting is a "social structure that facilitates social capital" (Coleman, "Social Capital in the Creation of Human Capital,"S105).
38. See also Coleman, Foundations of Social Theory (Cambridge, Mass., 1990), chap. 12, 300-321.
39. In 1917, for example, although thirty states had a maximum age of sixteen years for compulsory schooling, all but four granted labor permits at, or before, age fourteen, and the remaining four granted them at age fifteen. The education required for a labor permit was nowhere more than eight years and exactly eight years in just five states. In 1928, the maximum age of compulsory schooling had increased to eighteen in five states and to seventeen in another five states. But labor permits were still issued to those under sixteen in all but two states, and the education required for a labor permit was nowhere greater than eight years. The laws do not appear to have constrained youths to remain in high school, let alone to have graduated from high school. See Ward W. Keesecker, Laws Relating to Compulsory Education (Washington, D.C., 1929).
40. See Dennis Epple and Richard E. Romano, "Ends Against the Middle: Determining Public Service Provision When There Are Private Alternatives," Journal of Public Economics, LXII (1996), 297-326,
41. and Raquel Fernandez and Richard Rogerson, "On the Political Economy of Education Subsidies," Review of Economic Studies, LXII (1995), 249-262, for the role of income distribution in public-choice models of education.
42. James Poterba, "Demographic Structure and the Political Economy of Public Education," Journal of Policy Analysis and Management, XVI (1997), 48-66, finds that the greater the growth in the proportion of older people in U.S. states from 1961 to 1991, the lower was the growth in funding for K-12 education.
43. Alberto Alesina, Reza Baqir, and William Easterly, "Public Goods and Ethnic Divisions," NBER working paper 6007 (Cambridge, Mass., 1997), finds a negative relationship between ethnic fractionalization and spending on "productive" public goods, including education, in a cross section of U.S. localities c. 1990.
44. Graduation rates are "cleaner" in the sense that most states accredited high schools and set standards for graduation, whereas enrollment rates could have been overstated for many reasons, including the state's method of funding local education. Some ambiguity remains, however, with regard to the quality of education and how it changed over time. The graduation rate is equal to the number of high school graduates (including those from private schools and the preparatory departments of colleges and universities) divided by the number of seventeen-year-olds in a given state during a particular year. It should be noted that the data in figures 1 and 2 are described in detail in Goldin, "Appendix," and were assembled from state-level data on public high schools, private high schools, and the preparatory departments of universities and colleges. Although they did not originate in the national graduation data given, for example, in U.S. Bureau of the Census, Historical Statistics, they track those national totals well. In all cases, they are contemporaneous data reflecting graduation from high school at a point in time and as a fraction of the youths in a state.
45. We have also estimated longitudinal models with state fixed-effects pooling data from 1910, 1920, and 1930. The results for the key variables are similar to those in the levels regressions presented in Table 1. But the effects of some variables (for example, percentage Catholic and manufacturing employment share) cannot be estimated precisely when state fixed effects are included, and coefficients are constrained to be constant over time, because of the strong persistence of state differences in these variables. For details, see Goldin and Katz, "Why the United States Led."
46. "Full time" attendance means that the youth attended school for at least one day since September 1 in the previous year and did not list an occupation. We include only nonsouthern states to avoid conflating rural and small town with the South in the simple cross tabulations. The attendance data in Table 2 probably overstate the proportion of youths in secondary schools, because the U.S. federal population censuses of 1910 and 1920 inquired whether an individual had attended school at least one day during the preceding year. Attendance could have been at a night, correspondence, industrial, music, commercial, private, parochial, or regular-day school, among others. Furthermore, many young people, especially in the open country, could have been attending common schools at age 16 and 17, not state-accredited high schools. Margaret E. Greene and Jerry A. Jacobs, "Urban Enrollments and the Growth of Schooling: Evidence from the U.S. 1910 Census Public Use Sample," American Journal of Education, CI (1992), 29-59, report similar results for 1910, regarding the role of small towns.
47. The cross-state correlation of school districts per capita in 1932 and the high school graduation rate in 1928 is 0.49. This significant positive relationship between the density of school districts and high graduation rates remains in high school graduation regressions that control for population density or the urban share of the population. It is apparent even when examining only states outside the South. But the number of school districts per capita is closely related to wealth, automobile registrations per capita, and agricultural income per farm worker; it is not statistically significant in such regressions that include proxies for wealth. 20 On per capita wealth data, see the sources in Table 1; Goldin and Katz, "Why the United States Led."
48. The city of Des Moines used its local commercial magazine, Des Moines Wealth, to broadcast the superiority of its school system in comparison with all others in the United States. "Des Moines therefore equals all and excels most cities in . . . school attendance in proportion to population, high school enrollment, number of teachers in proportion to the size of the school system, and salaries paid to the teachers. . . . Des Moines is recognized the country over as a grand school city" (Des Moines Wealth, II [June 1910], 15).
49. State of Iowa, Iowa State Census, 1915 (Des Moines, 1916), xxxvi. Only one other state (South Dakota in 1915) asked about educational attainment before the federal population census did in 1940. Iowa repeated the question in its 1925 state census.
50. Richard Jensen and Mark Friedberger, "Education and Social Structure: An Historical Study of Iowa, 1870-1930," unpub. paper, Newberry Library (Chicago, Il. 1976), collected a sample from the original cards stored in Des Moines and linked it to both the 1925 Iowa State Census and the federal population manuscripts.
51. Daniel Scott Smith, "'The Number and Quality of Children': Education and Marital Fertility in Early Twentieth-Century Iowa," Journal of Social History, XXX (1996), 367-393, collected another sample designed for a fertility project.
52. These findings are also corroborated in an analysis, not presented here, using the individual-level data from our "rural" sample. We have matched the post-office addresses or town given in the Iowa census to information about the size of the town. Among fifteen-to-twenty-year-olds, those residing in towns of between 1,000 and 3,500 population attained the greatest number of years of high school and college. We also include controls for county, Iowa City, sex, church affiliation, nativity of parents, whether the household head was a farmer, and an indicator variable for whether the individual could be matched to a household head.
53. Gerald Gamm and Robert D. Putnam, "The Growth of Voluntary Associations in America, 1840-1940," published in this issue, find that the smallest towns in their sample had the largest number of associations per capita and that the largest cities had the smallest number. The towns in their study, however, are somewhat larger than those we are able to identify in the Iowa data.
54. The "free tuition" laws are not well known, and we have been unable to find a source documenting when each was passed. State education reports reveal that Nebraska's, first passed in 1895 but declared unconstitutional, was the earliest. A bill that met the constitutional objection was enacted in 1907 after two more unsuccessful tries. Some states (for example, California, Kansas, Oregon, and Washington) passed free tuition laws at the county level. By the mid-1920s, virtually every state with a large rural population had a free tuition law on its books. See William R. Hood, Legal Provisions for Rural High Schools (Washington, D.C., 1925). The high school enrollment rate computed from the Iowa State Census of 1915, using the ratio of the number of individuals of all ages who indicated that they attended high school in 1914 to the total number of fourteen-to-seventeen-year-olds, is almost identical to an analogous one computed from a set of contemporaneous records from high schools. The former estimate is 31.1 percent, whereas the latter estimate is 31.5 percent. We compute the former estimate by weighting the figures derived from the two parts of our sample (large cities and counties without large cities) - the weights being chosen to produce estimates representative of the overall state population in large cities and in counties without large cities in 1915. The procedure for latter estimate, derived from a completely different set of data, is in Goldin, "Appendix."
55. The rural attendance rates are lower than those in the three large cities because the rural data include those in the "open country." The data from the Iowa State Census of 1915 enable a more accurate calculation of the percentage of youths attending school than do the federal population censuses of 1910 and 1920. School attendance in the Iowa State Census is given in months. A few students attended school for fewer than six months; most attended for nine and some for eight. All the regressions in Table 4 have also been estimated using logits and probits with no important change in the underlying conclusions. We report the easier-to-interpret linear-probability models with appropriately adjusted robust standard errors.
56. Head of the family status was inferred using a simple algorithm that bestows head status to a married male in the household who meets various age criteria with respect to the children, or to a widowed or divorced male in the household in the absence of a married woman. In the rural sample, 86.3 percent of the household heads were male and 9.4 percent were widowed (or divorced) women. In both samples, only 5 percent of household heads were married women who either did not correctly state their marital status or whose husbands were not found in the census. The inclusion of head's income and country of origin dummies does not alter the main results. On sex differences in high school enrollment and graduation, see Goldin, "America's Graduation from High School," and on co-education in general,
57. see Tyack and Elisabeth Hansot, Learning Together: A History of Coeducation in American Schools (New Haven, 1990).
58. See Edward Glaeser and Spencer Glendon, "The Demand for Religion," Harvard University working paper (Cambridge, Mass., 1997) for the relationship between economic success and religion using modern data. They find that individuals claiming no religious belief have similar amounts of education than those with religious beliefs, but have far lower incomes. Note that the Iowa State Census asked "church affiliation," whereas Glaeser and Glendon use a question on religious belief. The variable in the 1915 Iowa State Census is an associational measure rather than one concerning beliefs.
59. Educational differences by family background would also have been large if we had considered elite occupations rather than the schooling of the household head. George S. Counts, "The Selective Character of American Secondary Education," The School Review and The Elementary School Journal, XIX (May 1922), 40, made similar points about differences in school attendance by father's occupation in Mt. Vernon, N.Y. But in Count's data, by the senior year of high school, almost 88 percent of all students were the children of white-collar workers, whereas 49 percent were in sixth grade.
60. On earnings for different occupations and the educational wage premium, see Goldin and Katz, "Decline of Noncompeting Groups."
61. See Goldin, "America's Graduation from High School," on the importance of figuring out whether the added years should be considered as secondary or grammar school. Older Americans in 1940 - the first year when the federal census inquired about educational attainment - appear to have vastly overstated their years of education in comparison with data from secondary schools, contemporaneous with their possible attendance. One possibility is that many Americans attended grades nine through twelve in common schools.
62. The estimated returns to high school are similar in specifications that also include controls for church affiliation, county, city, and parents' nativity.
63. The returns that we calculate do not net out the direct costs of education, which would have been substantial for many business schools but close to zero for public high schools. Most individuals who stated that they attended a business school went for few years, if that. Thus the returns to business school, even netting out the costs, are enormously high. Many of the younger males with business-school training were bookkeepers, and many of the females were stenographers. The high returns in 1915 indicate why high schools began to offer commercial courses and why young people flocked to commercial schools in the 1910s and 1920s.
64. David H. Autor, Lawrence F. Katz, and Alan B. Krueger, "Computing Inequality: Have Computers Changed the Labor Market?" NBER working paper 5956 (Cambridge, Mass., 1997), Table 1, report that a year of college in 1995 had a 12 percent return but only an 8 percent return in 1980.
65. We thank Putnam for providing us with his indices of social capital and educational performance. See Jay Braatz and Putnam, "Families, Communities, and Education in America: Exploring the Evidence," Harvard University working paper (Cambridge, Mass., 1997).
66. The social-capital index is defined in the notes to Figure 4. The reported correlation coefficients in this paragraph and that following cover the "lower forty-eight" states except where indicated. State per capita income data in 1900, and state agricultural income per farm worker data in 1900, are from Simon Kuznets, Ann Ratner Miller, and Richard A. Easterlin, Population Redistribution and Economic Growth: United States, 1870-1950. II. Analyses of Economic Change (Philadelphia, 1960).
67. State per capita wealth data for 1912 are from U.S. Department of Commerce, Statistical Abstract of the United States (Washington, D.C., 1925).
68. State per capita income data in 1994 are from U.S. Department of Commerce, Statistical Abstract of the United States (Washington, D.C., 1996).
69. The state educational-performance index combines three factors. See Braatz and Putnam, "Families, Communities, and Education in America." The educational-performance index is defined in the notes to Figure 4.