Retirement and Pensions in American Economic History

The proportion of the US population that survives to retirement age has increased over time, as has the share of the older population that retires. Higher incomes at older ages explain the increase in the incidence of retirement. Pensions provide much of that income. In general, public-sector workers, especially military personnel, were covered by pensions before their private-sector counterparts, and coverage in the public sector remains more widespread, and generous, than it is in the private sector. Public-sector pension plans are more likely to be defined benefit plans than are private-sector plans. Many public-sector employers have promised their employees more in benefits than they have set aside to pay for those benefits. Estimates suggest that the federal, state, and local retirement plans currently in operation are underfunded by as much as $5 trillion.

Manufacturing Productivity Growth in American Economic History

This chapter provides an overview of labor and total factor productivity growth in the manufacturing sector in the United States from colonial times to the present. An introductory section defines concept and terms. This is followed by an historical survey of improvement in the eighteenth and nineteenth centuries, and sections on the manufacturing revolution of the 1920s and the sector’s contribution during the Great Depression. The remainder of the chapter provides a quantitative perspective on manufacturing productivity growth and its contribution to the overall economy from the end of World War I through the first decade of the twenty-first century.

Agriculture in American Economic History

This chapter examines the crucial roles of biological learning and mechanization in facilitating the long sweep of American agricultural expansion and productivity growth. It also explores the major debates concerning the relationship between agricultural growth and overall economic development, the sources and impacts of the twentieth-century decline of the agricultural sector, the role of government policies, and the directions of current and promising future research. The chapter highlights the roles of biological innovation and mechanization in driving territorial expansion and productivity growth. It also investigates the forces behind the structural change affecting the role of agriculture in the US economy.

Introduction

This introduction offers an overview of the research discussed in the 37 chapters in the Oxford Handbook of American Economic History. It discusses the path of economic growth and development and the methods that economic historians have used to measure and analyze them. Over the last 300 years population growth has slowed, and the population has lived longer and healthier lives. The economy has shifted from predominantly agricultural through a major industrialization period into a service-based modern economy largely located in urban areas. Per capita incomes have grown largely through increased productivity from improved technologies, better education, improved organizations of processes, and governments that established private property rights, rule of law, and protections of individual freedom. Capital aspects of the economy have varied more than commonly known, and financial institutions have gone through several innovations as their regulatory regimes have waxed and waned. A diverse population of men, women, ethnic groups, races, and ages played major roles in labor markets. Labor market institutions changed with the elimination of slavery, the development of “at will” contracts, internal labor markets, and changing treatment of collective bargaining. In the federal system of governments, states were initially the dominant actors, followed by local governments in the late nineteenth century, and then an expansion of all governments and the national government in the last hundred years, partially in response to the major crises of the World Wars and the Great Depression.

Demography in American Economic History

This chapter deals with the population of the United States from its beginnings in colonial times since the first census in 1790 to the present. It deals with the processes of population growth and change: fertility, mortality, urbanization, and migration, both external and internal. In the 220 years since 1790, the population of the United States increased from about 4 million to almost 309 million persons in 2010. Relatively high fertility in earlier times combined with moderate mortality and significant net immigration combined to create this growth. The chapter also deals with changes in population by race, ethnicity, and location.

Manufacturing Growth and Structural Change in American Economic History

Over past 200 years, industrialization was the driving force in the economic development of most nations experiencing “modern economic growth.” Industrial activity generally expanded faster than the economy as a whole, and the sector grew to account for sizable shares of output, employment, and trade. Manufacturing activities have generally experienced faster rates of productivity growth than the economy as a whole and the sector has often paid higher labor wages. Manufacturing also contributes materiel and technology for military purposes. For these reasons, policymakers and the public have long viewed manufacturing as being of greater importance than other activities. This chapter surveys growth and structural change in the American manufacturing sector over the past 200 years. It chronicles the sector’s transformation during the first (1810–1860), second (1870–1920), and third (1970–present) industrial revolutions. It examines the forces, such as globalization, information technologies, and deindustrialization, shaping the sector today.

Executive Compensation in American Economic History

This chapter documents the evolution of executive compensation in large, publicly traded American corporations over the past century. Executive pay followed a J-shaped pattern. The real value of median total pay declined sharply during World War II, then fell slowly in the late 1940s. From the 1950s to the mid-1970s, executive pay increased at about 0.8 percent annually, but it accelerated quickly from the mid-1970s to the early 2000s, reaching rates of 10 percent in the 1990s. The structure of pay also underwent an important transformation. Until the mid-1980s, the compensation of executives was primarily composed of salaries and bonuses. Since then, the use of equity-based pay has become increasingly widespread. The chapter reviews theories for the long-run changes in executive pay, including rent extraction, returns to talent, and the role of government interventions. None of these alone can account for the patterns in executive compensation over time.

US Fertility Rates and Childbearing in American Economic History, 1800–2010

Over the past two centuries, the United States has witnessed dramatic changes in fertility rates and childbearing. This chapter describes shifts in childbearing and family size from 1800 to 2010 and describes the role of different factors in this evolution. Demand factors such as industrialization, urbanization, rising family incomes, public health improvements, and the growth in women’s wages generally reduced the benefits and raised the costs of having many children. Supply factors such as increases in infant and child survival and improvements in the technology of contraception and abortion have also altered parents’ decisions about their childbearing. This chapter summarizes the long-run trends in US fertility rates and completed childbearing, both overall and by mothers’ race/ethnicity and geography. Next, it evaluates evidence on the determinants of childbearing, including both economic and demographic explanations for these patterns. A final section weighs the evidence supporting the existence of two fertility transitions.

Anthropometric History in American Economic History

Anthropometric history arose in the 1970s and gained momentum as a supplement to traditional economic measures of the standard of living. he discovery of very large number of measurements of height have allowed social scientists to use heights as a summary measure of health from conception to maturity. Though dominated by genes, individual height is sensitive to diet, work effort, and disease, while income and its distribution affect average height within a population. Among the interesting results from hundreds of studies are (1) Americans were taller than Europeans during the eighteenth and nineteenth centuries; (2) health declined during the early decades of industrialization in the United States (and elsewhere); (3) children bore the appalling brunt of slavery; (4) Plains Indians were tall during the nineteenth century. The superabundance of height records and surprising new insights into the standard of living bode well for the future of this research.

Business Organization in American Economic History

This chapter presents a history of the organization of American enterprise, from the first corporations to the emergence of large, vertically integrated conglomerates. It begins with a discussion of the monopolistic privileges of early corporations, and efforts to reform the process by which corporations were created. It then presents a discussion of the alternative organizational forms that became available to entrepreneurs. Finally, it analyzes the rise of “big business” in the late nineteenth century, and the legal and institutional context within which those enterprises began to emerge. The discussion of each is focused on the changing nature of the problems faced by entrepreneurs, and the changing legal and institutional environment in which they operated. Among the topics discussed are the evolution of corporation law, the choice of organizational form, recurring problems in corporate governance, the role of financiers in corporate governance, and the emergence of pyramidal holding company structures.