The Socioeconomic Return to Primary Schooling in Victorian England

1. The Socioeconomic Return to Primary Schooling in Victorian England Jason Long Department of Economics Colby College and University of Oxford March 2006

2. Larger Project: Mobility in 19th century Great Britain • Create large, nationally representative panel data for Victorian Britain. • Use it to analyze mobility. • Geographic mobility: Internal migration; Rural-urban migration (Long, 2005); Migration to U.S. and Canada • Socioeconomic mobility: Intra- and intergenerational mobility; Effect of migration on mobility; Effect of education on mobility • Compare results to other, similar countries: U.S. (Long and Ferrie, 2005), France (Bourdieu, Ferrie, Kesztenbaum, 2006) • Working under NSF grant SES-0517925: “Labor Mobility in Victorian Britain: An Analysis Using Matched Census Data”

3. Why study education in Victorian England? • Key element in England’s growth story, especially England’s decline. • Long tradition in economic history literature – Landes (1969), Mathias (1969), Crouzet (1982) – of attributing England’s protracted growth slow-down and loss of leadership to its underinvestment in human capital. • Earlier historians of the subject – Birchenough (1914), Curtis (1948) – harshly criticize quantity/quality of primary education. • England transitioning from voluntary schooling provided by the market to mandatory schooling provided by the state (Education Act, 1870). Later than Germany (1763), U.S.; concurrent with France. • Low relative level of primary and secondary schooling in England has been called “the greatest anomaly in global nineteenth century educational history” (Lindert, 2000). • Opportunity to study economic return to voluntary primary education – impossible if primary education is universal.

4. Research Questions • 1. Who were the students? • What were the determinants of schooling? • 2. What was the return to schooling, or the “treatment effect” of primary school attendance? • Did education offer a path to upward mobility? • 3. Was it worth it? • Did the benefits outweigh the costs? • 4. What can be said about England’s investment in primary education? • Was the quality/quantity indeed suboptimal?

5. Results • Primary school attendance strongly correlated with father’s SES, household’s opportunity cost of schooling, and school availability. • Real but small economic return to primary schooling • Pecuniary benefit of schooling easily outweighed cost, but… • Return was small relative to effect of other variables (father’s SES, living in urban area) and relative to modern results: 1.3% increase in adult earnings per year of schooling, compared to 5–15% for secondary schooling in developed economies today and 7% for primary schooling in developing economies today. • Argues against the most scathing criticisms of 19th century English primary schooling. • Underinvestment not the problem? Return was low, perhaps because of poor school quality, perhaps because of labor market rigidities.

6. Outline • Introduction 1. Previous Research 2. The Data 3. Background on Victorian Schools 4. Simple Reduced Form Results A. Determinants of Schooling B. Economic Effect of Schooling 5. Extensions A. Estimating Years of Schooling B. Endogenous School Choice 6. Conclusions and Future Work

7. Previous Research • Failure of education in England Landes (1969), Mathias (1969), Crouzet (1982) • Defenders of English education West (1970, 1975), Hurt (1971), Sutherland (1971) • Adult male literacy ↑ from 67.3% in 1841 to 80.6% in 1871 • Effect of education on earnings Card (1999), Harmon & Walker (1995) on developed countries • 6 / 15% increase in earnings per year of school (OLS / IV) Schultz (2003) on Africa, average of six countries • 7% increase in earnings per year of primary school (OLS) • Mitch (1984, 1992): Effect of literacy in 19th century England • Upward intergenerational mobility for unskilled sons = 48% for literate, 22% for illiterate (1869–73)

8. Problems with Previous Data19th Century Marriage Registries • Currently, only way to examine socioeconomic mobility in 19th century Britain • Observe father’s and son’s occupation, son’s signature • Do not observe school attendance: Literacy  Schooling • Signature  Literacy • Includes only Anglican ceremonies • Father and son at point in time  Does not control for stage of life cycle

9. The Data • 2% Sample of 1851 Census 168,130 men living in England and Wales • + • Entire 1881 Census of England and Wales All 12,640,000 men in the census • ↓ • New Dataset 28,474 men observed in 1851 and 1881

10. Match Criteria • First, last name phonetic match (e.g. “John”/“Jon”; “Aitken”/“Aitkin”). Middle initial match. • | Reported Age1881 – (Reported Age1851 + 30) |  5 • Birth county and parish match. • Approx 16,000 parishes in England and Wales • Size: Median = 405, Mean = 1,842 • High-resolution information • No duplicate matches. • No missing information.

11. Example: John Jowitt in 1851 Born 1844, Brotherton, Yorkshire

12. Example: John Jowitt in 1851 Born 1844, Brotherton, Yorkshire

13. Example: John Jowitt in 1881 Born 1844, Brotherton, Yorkshire

14. Example: John Jowitt in 1881 Born 1844, Brotherton, Yorkshire

15. Example: John Jowitt

16. Another Example: Alfred H King and Occupational Mobility

17. Expected Attrition • From Death: approx 85,000 • From Emigration: approx 13,500 • Should match 69,630 (41%) • Actual match rate = 17% • Matched 23% before discarding duplicates • Difference due to enumeration error (age, name, birthplace; missed)

18. Estimation Sub-sample • 1. Potential school age in 1851: between 6 and 13 years old • 2. Son in 1851, living with father • 3. Labour market information for 1881 and for father: Occupation  Imputed earnings •  5,337 school-age sons withsolid occupational information

20. Making Use of OccupationEnumerators’ Instructions • “In trades the master is to be distinguished from the Journeyman and Apprentice, thus- ‘(Carpenter, master employing [6] men)’; inserting always the number of persons of the trade in his employment on March 31st. • “In trades where women or boys and girls are employed, the number or each class should be separately given. Where the master is one of a manufacturing or mercantile firm, the entry should be after this form: – ‘Cotton manufacturer – firm of 3, employ 512 men, 273 women, 35 boys, and 272 girls.’”

21. Making Use of OccupationOption 1: Occupational Classification (Armstrong, 1972) • Class I. Professional etc., occupations • accountant, attorney, surgeon, large employer • Class II. Intermediate occupations • bookkeeper, manager, farm foreman, • craftsman (employer) • Class III. Skilled occupations • blacksmith, nurseryman, weaver, craftsman (non-employer) • Class IV. Partly skilled occupations • agricultural labourer, flax dresser, rat destroyer • Class V. Unskilled occupations • general labourer, rag & paper collector, bone sorter

22. Making Use of OccupationOption 2: Imputed Earnings

23. Students in the CensusThe Key Occupation: “Scholar” • No separate question (as in U.S. census) • Definition varied between censuses • Best definition – most specific, most restrictive – in 1851: Report children as scholars if older than 5 and were “daily attending school, or receiving regular tuition under a master or governess at home.”

28. Simple Reduced Form Models • 1. Correlates of School Attendance, 1851: • P(s= 1) = (1Father’s SES + 2Cost + 3Age + 4Age2+ 5 Z) • 2. Correlates of Class/Wage, 1881: • yi,1881 = f(1School Attendancei,1851 + 2yfather,1851 + 3X + ) • Potential problems: • Observe attendance not duration • Attendance endogenous?

30. Simple Econometric Models • 1. Correlates of School Attendance, 1851: • P(s= 1) = (1Father’s SES + 2Cost + 3Age + 4Age2+ 5 Z) • 2. Correlates of Occupational Class/SES, 1881: • yi,1881 = f(1School Attendancei,1851 + 2yfather,1851 + 3X + ) Most direct, immediate labor market outcome measure is occupational class/SES

34. Extension 1: Estimating Duration of Attendance • Age + Attendance in 1851 + Family Characteristics  Duration • Three Assumptions: • If attend, begin at age 6 • Schooling continuous • No school past 13 • Then probability of being in school at any age is where ha is the hazard rate at age a. • For example, at age 8 p8 = p6(1 – h6)(1 – h7) All p’s observable  All hazards can be recovered

35. Estimating Duration of Attendance, continued • Can refine analysis by conditioning on observable characteristics: • Z = ( Father’s SES, Siblings’ School Attendance ) Calculate background-specific hazard rates as • With the hazard rates in hand, the conditional expectation of total school duration d for an individual of age a and background characteristics z observed to be in school in 1851 is

36. Estimating Duration of Attendance, continued • The conditional expectation of total school duration d for an individual of age a and background characteristics z observed to be out of school in 1851 is Back to the example of a = 8: E(d | s=1, a=8) = 3 + (1–h8)h9 + 2(1–h8)(1–h9)h10 +  if in school E(d | s=0, a=8) = p6h6 + 2p6(1–h6) if out of school

38. Previous Research • Failure of education in England Landes (1969), Mathias (1969), Crouzet (1982) • Defenders of English education West (1970, 1975), Hurt (1971), Sutherland (1971) • Adult male literacy ↑ from 67.3% in 1841 to 80.6% in 1871 • Effect of education on earnings Card (1999), Harmon & Walker (1995) on developed countries • 6 / 15% increase in earnings per year of school (OLS / IV) Schultz (2003) on Africa, average of six countries • 7% increase in earnings per year of primary school (OLS) • Mitch (1984, 1992): Effect of literacy in 19th century England • Upward intergenerational mobility for unskilled sons = 48% for literate, 22% for illiterate (1869–73)

39. Comparing Benefit and Cost • Information on primary school cost from Mitch (1992) • Avg weekly fees: 2p (subsidized), 6p (unsubsidized) • Approx 67% had access to the cheaper, subsidized rate • Average duration: 25 weeks per year • Opportunity cost greater, average £2.5/yr • Average total cost of one year = £2.85 • Avg annual wage premium of £1.4 for one year of school • With work-life of 30 years and  = 0.05, PDV = £16.3 • With work-life of 20 years and  = 0.10, PDV = £ 7.1

40. Extension 2: Endogenous School Choice • School attendance may not be exogenous. • Parents consider net benefit to child of schooling. • Potential “ability bias”. • Structural Model of Endogenous School Choice • (Heckman, 1979, 1990; Harmon & Walker, 1995; many others) Selection of school attendance over non-attendance and treatment effect of schooling jointly estimated by maximum likelihood

41. Identification • Identification comes from two sources: • Nonlinearity of model – si appears in wage equation, while si* appears in school decision equation • Variables included in z but excluded from x • Schools / 1,000 residents (county) F = 2.50 • Older sister in household • Number of younger siblings • Father's age • Percent sons • Servant in household F = 2.34 • School attendance of siblings F = 78.02

43. Summary and Conclusions • Primary school attendance strongly correlated with father’s SES, household’s opportunity cost of schooling, and school availability. • Real but small economic return to primary schooling • Pecuniary benefit of schooling outweighed cost, but… • Return was small relative to effect of other variables (father’s SES) and relative to results for secondary school in modern developed economies and primary school in modern developing economies. • Argues against the most scathing criticisms of 19th century English primary schooling. • Underinvestment not the problem? Return was low, perhaps because of poor school quality, perhaps because of labor market rigidities.

44. Future Work • Develop comparison with U.S. • Add Scotland – very different education system • Add women – more difficult to matchCurrently have approximately 5,000. • Link university students from 1881 to 1901; expand analysis to economic effect of university education. What did English college grads do? What did Oxbridge grads do? What did US and German college grads do?

45. The Socioeconomic Return to Primary Schooling in Victorian England Jason Long Department of Economics Colby College and University of Oxford March 2006