Trends in Education and Earnings, 1950-70: A Structural Analysis

Abstract

Using aggregate data for occupations, this study examines changes between 1950 and 1970 in the relationship between (1) level of education and level of earnings and (2) inequality of education and inequality of earnings. As a heuristic device the findings are considered in the context of free-market (human capital/functionalist) and structural (job competition/market segmentation) explanations of inequality. The results of the analysis provide support for elements of both explanations. Consistent with the structural position, we find that in spite of the frequently observed overall stability in inequality of earnings over the three time points, there are sizeable increases in inequality of earnings among some lower SES occupations and at the same time decreases in inequality of earnings among some higher SES occupations. The fact that the effect of education on relative level of earnings shows no consistent pattern over time would also support the structural over the free-market perspective. On the one hand, in support of free-market theories there is a stronger effect over time of level of education on the absolute level of earnings, and inequality of education on inequality of earnings. In addition the significance of the proportion of nonwhite workers in an occupation for both level of earnings and inequality of earnings declines between 1950 and 1970. Sociologists have long been familiar with the fact that average levels of both education and income rise as societies develop industrially (Lenski; Treiman). How economic and technological change affect the relationship of these signal dimensions of stratification, however, is still unclear a decade after Treiman's observation that this indicates a significant gap in stratification theory. Over the past fifteen years there has been much re*Revised version of a paper presented at the Seminar on Social Stratification and Intellectual Skills sponsored by the Research Committee on Social Stratification of the International Sociological Association, 1980. This research was partially supported by operating grants from the University Research Policy and Grants Committee of the University of Calgary and the Graduate School of the State University of New York at Buffalo. We wish to thank Sambhu Nath for his expert programming assistance. ? 1982 The University of North Carolina Press. 0037-7732/82/020436-55$02.00