Devon Bull

ECON 765

Critical Essay 3

Rosenbloom

The Human Capital Century

The twentieth century experienced an incredible shift in demand for advanced

education in the working masses. This was driven by a changing environment which included

the use of higher learning skills like science and mathematics in the business world. World

powers like the United States, England, and Germany etc. all began the twentieth century with

relatively the same fraction of population having received advanced schooling. However, the

United States experienced a period of explosive growth in this area that would take decades for

the other countries to achieve. The author, Claudia Goldin, seeks to examine what drove this

massive change and why it took other countries much longer to accomplish this. Goldin also

attempts to compare her findings with our educational system today.

Goldin describes the twentieth century as the “Human Capital Century”. This is because

“for the first time in history the schooling of the masses at the secondary and higher levels was

perceived to enhance economic production” (pg. 1). According to Goldin this was a large step

away from previous thinking by world leaders who had an almost exclusive focus on technology

and physical capital. Where countries had previously studied each other’s manufacturing

techniques and technologies they now turned their attention to studying each other’s

education systems. Many countries specifically began to study the American educational

system because of its sudden and massive success.

To examine the American educational system Goldin first identifies what she describes

as “virtues” that come from basic “democratic and egalitarian principles that influenced the

education system” (pg. 3). These virtues are things like public funding, a secular government,

gender neutrality, etc. Around 1900 the American education system underwent fundamental

changes to create a large scale formal education system for the masses. According to Goldin,

the environment of the U.S. promoted both the possibility of such a system because of its

virtues. These virtues when paired with the need for such a system from the business world

brought these forces together to create the fundamental changes to the American education

system.

Goldwin finds that around the turn of the century the American style of education

began to become more practical, scientifically oriented, and with an emphasis of having a

variety of easily transferable skills. A “new” type of economy was driving demand for these

changes away from a classical education towards specialization, specifically in the sciences.

Thus, Goldwin finds the return on investment of attending secondary school increases

significantly during this period. Using unique data from Iowa we find that an additional year in

high school in Iowa “added more than eleven percent to the income of the individual”. These

returns to the individual are even more powerful when we consider that access to high schools

dramatically increased during the time period.

Goldwin describes this jump in access to education as the “High School Movement”.

Essentially it can be boiled down to this: most growth in secondary school enrollment is due to

the creation of high schools where none had previously existed. We see this because

“secondary school enrollment increased rapidly after 1910” which Goldwin asserts is when

many new high schools were created (pg. 18). The combination of increased incentives and

easier access fueled a large jump in enrollment that would take many countries decades to

achieve.

Goldwin does a good job at examining what factors caused the rapid increase in

enrollment in the American education system as compared with other world powers of the

time. However, her emphasis on differences in the European style of educational systems and

what role they played in their enrollment levels in questionable. The Europeans had central

systems of education that allowed for students to receive a uniform education. Goldwin

attempts to argue that centralized systems are detrimental to a country’s education system. I

strongly disagree with this because a centralized system should theoretically allow for more

rapid iterations to adapt to changes in the demand side. This isn’t to say there weren’t aspects

of European society that negatively affected their academic enrollment rate when compared

with American society.

When Goldin first discusses the virtues of American society she offers little empirical

evidence to support these claims. However, her analysis of them clearly indicate that what she

describes as virtues definitely impact enrollment rates, especially when compared with Europe.

While these factors like the so called virtues can’t be thrown aside as irrelevant it seems clear

to me that access to secondary education was the critical element in raising enrollment rates.

Access to education arguably played the most important role in increasing the amount of the

population that attended secondary school. Goldwin mentions that most of the increased

enrollment rates are directly attributed to the creation of new high schools. I believe this to be

one of the key findings from Goldwin’s work, however, that isn’t to say we can apply her work

to the present day as she attempts to.

Goldwin compares the historical factors that drove academic enrollment with our

modern education system and says that some of these “virtues” have now become “vices”.

There is one fundamental issue with her assertions. I would argue that almost every subject

explored by Goldwin is virtually irrelevant in terms of our education system today. She doesn’t

analyze which education systems produced a more intelligent general public. Goldwin is simply

comparing enrollment rates among different countries. Unfortunately there are two main

forces that drove this enrollment increase: access to education and return on investment in

terms of jobs and income. Goldwin’s work is interesting and provides a detailed look into what

caused the U.S. become a world leader in education. However we must look elsewhere if we

are to improve our current education system.