Working Paper: NBER ID: w1758
Authors: Robert A. Margo; Georgia C. Villaflor
Abstract: Changes in the skill differential are often used by economic historians to proxy changes in income inequality. According to Jeffrey Williamson and Peter Lindert, American skill differentials rose sharply between 1820 and 1860, which they interpret as increasing income inequality. Using a large, new sample of wage rates drawn from military records, we find no evidence of an aggregate "surge" in antebellum skill differentials. We do find, however, that skill differentials on the frontier rose relative to levels in settled areas. We show how a reduction in the costs of migrating from old to new regions can explain this finding.
Keywords: Skill Differentials; Income Inequality; Migration Costs; Antebellum Period
JEL Codes: N31; J31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| migration costs (F22) | skill differentials (J31) |
| northern frontier skill differentials (J45) | settled areas skill differentials (R23) |
| overall trend (E32) | skill differentials (J31) |
| skilled wages growth rate (J39) | unskilled wages growth rate (F66) |