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Atlanta Fed Working Papers


Income and Education of the States of the United States: 1840–2000

Scott Baier, Sean Mulholland, Chad Turner, and Robert Tamura
Working Paper 2004-31
November 2004

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This article introduces original annual average years of schooling measures for each state from 1840 to 2000. The paper also combines original data on real state per-worker output with existing data to provide a more comprehensive series of real state output per worker from 1840 to 2000. These data show that the New England, Middle Atlantic, Pacific, East North Central, and West North Central regions have been educational leaders during the entire time period. In contrast, the South Atlantic, East South Central, and West South Central regions have been educational laggards. The Mountain region behaves differently than either of the aforementioned groups. Using their estimates of average years of schooling and average years of experience in the labor force, the authors estimate aggregate Mincerian earnings regressions. Their estimates indicate that a year of schooling increased output by between 8 percent and 12 percent, with a point estimate close to 10 percent. These estimates are in line with the body of evidence from the labor literature.

JEL classification: O40, J24, E01, N00

Key words: state human capital, state output per worker, returns to schooling


The authors thank the workshop participants at Clemson University, Texas A & M, the University of Kentucky, SUNY Buffalo, the University of Virginia, the University of South Carolina, the 2004 Midwest Macroeconomic Meetings, Iowa State University, and joint seminars at UNC-Chapel Hill and Duke University for helpful comments. They benefited from suggestions by Kevin Murphy and Casey Mulligan. The views expressed here are the authors’ and not necessarily those of the Federal Reserve Bank of Atlanta or the Federal Reserve System. Any remaining errors are the authors’ responsibility.

Please address questions regarding content to Scott Baier, Assistant Professor of Economics, John E. Walker Department of Economics, Clemson University, Clemson, South Carolina 29634-1309, (864) 656-4534, and the Federal Reserve Bank of Atlanta, sbaier@clemson.edu; Sean Mulholland, Assistant Professor of Economics, Auburn University at Montgomery, Montgomery, Alabama 36124-4023, (334) 244-3989, smulholl@mail.aum.edu; Chad Turner, Visiting Assistant Professor of Economics, Williams College of Business, Xavier University, Cincinnati, Ohio 45207, (513) 745-3062, turnerc1@xavier.edu; or Robert Tamura, Associate Professor of Economics, John E. Walker Department of Economics, Clemson University, Clemson, South Carolina 29634-1309, (864) 656-1242, and the Federal Reserve Bank of Atlanta, rtamura@clemson.edu.

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