Public schooling and corporate regulation: essays on institutions of development in the early twentieth-century United States
Baker, Richard B.
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This dissertation studies three institutions of development in the United States during the early twentieth century. The first chapter exploits a unique shift in agricultural production in the American South to analyze how the cultivation of a child labor intensive crop (cotton) impacted schooling, with a particular focus on racial differences. Since African-American children were more likely to be employed as farm laborers than white children, their educational attainment may have been more responsive to changes in cotton production. I test this prediction using newly collected county-level panel data for Georgia, a major cotton producer. The results reveal that reductions in cotton production increased the school enrollment rate of African Americans. By contrast, I find little evidence that cotton production affected the enrollment rate of whites. This suggests that the shift away from cotton production after the arrival of the boll weevil can explain a significant amount of the narrowing of the racial differential in enrollment rates. The second chapter explores how Southern school boards responded to changes in their budgetary environment. I utilize exogenous variation in state school funds generated by discontinuous budget allocation rules, and employ a differences-in-differences strategy, to investigate how the relative quality of education for African Americans changed with the level of state funding for education. Results suggest whites, rather than African Americans, bore the brunt of budget cuts, perhaps because there was little fat to trim from the budgets of African-American schools. The third chapter of this dissertation (co-authored with Carola Frydman and Eric Hilt) estimates the effect of President McKinley's assassination on corporate valuations. McKinley acted favorably toward business interests, and while in office he permitted significant merger activity. His Vice President, Theodore Roosevelt, was a well known reformer and took a stronger stance against trusts. Our analysis indicates that firms vulnerable to antitrust prosecution saw greater decreases in their valuations following the assassination. The value of railroads susceptible to antitrust litigation declined further when Roosevelt sought to apply the Sherman Act to railroads, providing further evidence that firms benefited from regulatory forbearance during McKinley's Presidency.