The Race between Education and Technology (review)

This much-anticipated book offers a bold thesis about the patterns of inequality in twentieth-century America. The culmination of a series of papers and articles extending across more than a decade, it is a rare example of historical analysis applied to contemporary policy concerns. It also features an array of data and analyses that will surely fuel discussion and debate in a number of fields. In short, it is the type of book that promises to be widely influential, in one way or another, for some time.

Despite its title, throughout this study the authors focus more on the history of education than technology. At its core is an argument about the expansion of schooling and its impact on the U.S. economy. Goldin and Katz contend that certain unique features of American education—such "virtues" as local control and funding, coeducation, separation of church and state, and a general openness—led to rapid expansion of schooling, providing the country with a substantial human-capital advantage for most of the twentieth century. On the other side of the equation, they maintain that technological change demanded ever-higher levels of education in the workforce, even in manufacturing. Direct evidence for the latter point is sketchy, featuring a narrow range of industries, but the authors point to the advent of electrification and continuous and batch-process production techniques as prompting employers to seek educated workers. This combination of factors, they suggest, accounted for an extended period of relative equality within the labor force, which began to change when educational expansion slowed substantially during the 1970s and beyond.

Utilizing data from the 1915 Iowa and U.S. decennial censuses, Goldin and Katz construct econometric models that link educational levels to variation in wage inequality. In doing so, they make critical assumptions about the distribution of skills within levels of attainment and the relationship of skill-biased technology to demand for workers with different amounts of schooling. Though broadly persuasive, this analysis is conducted at a high level of abstraction, leaving many details unexplored, such as the actual pace and scope of technological change. This approach may be suitable to labor economists, but it doubtless will leave historians yearning for additional evidence. In the end, Goldin and Katz see the rate of educational expansion as the principal determinant of inequality, even more than immigration and demographic shifts or the declining influence of unions. Although these arguments are clearly supported by straightforward analyses of national data, they will likely be greeted with skepticism in many quarters, regardless of their conceptual elegance.

Apart from identifying American "virtues," Goldin and Katz offer a barely explicit argument about educational growth, suggesting that individuals pursued higher levels of attainment in search of favorable economic returns. It is more an assumption than a proposition, however, and they generally ignore the sizable literature on educational expansion, which offers alternative explanations. More importantly, this interpretive frame fails to account for the abrupt flattening of educational growth after 1970, even while demand for skilled workers apparently surged ahead. The discussion of possible explanations for this trend is the book's least compelling chapter from the standpoint of data analysis. Puzzling over the failure of today's youth to take advantage of high returns to college education, Goldin and Katz look to research on resource inequality and the isolation of urban minority youth for answers. They suggest that certain past virtues may represent impediments to growth today, such as local control and funding of public schools. But the tone is tentative and the policy suggestions echo those favored by mainstream educational researchers: lower class sizes, job training programs, and expanded college aid for disadvantaged youth. Reasonable as this conclusion may be, it begs the question of factors prompting educational expansion in the past and their relevance to current problems.

That said, there is much to recommend this book to a wide spectrum of readers. The basic argument is compelling, and historians, economists, and other scholars are...