Poverty and Prosperity: A Longitudinal Study of Wealth Accumulation, 1850-1860

This paper depicts and analyzes the wealth distribution and wealth mobility in a national sample of nearly 1,600 households matched in the 1850 and 1860 manuscript schedules of the census. Gini coefficients, a transition matrix, the Shorrocks measure, and a regression model of wealth accumulation are estimated from these data. The findings shed light on theories of the wealth distribution, life-cycle behavior, regional economic performance, and the empirical basis for critiques of capitalism. Blacks accumulated slowly but the foreign born performed remarkably well. The distribution of wealth was relatively unequal on the frontier but the region performed well in reducing propertylessness. Residents of eastern cities were less fluid than other residents of the rural North. Blue collar workers and the unskilled declined relative to farmers and white-collar workers during the decade, which suggests that other aspects of wealth determination may have outweighed stretching of the wage structure as an explanation of growing inequality during industrialization. Comparisons with data on net family assets collected by the National Longitudinal Survey in the 1960s and 1970s show that mid-nineteenth century households were less mobile at the lower end but more mobile at the upper end of the wealth distribution.