War Mobilization and the Great Compression
AbstractDuring the 1940s, the diversion of 55% of the workforce to wartime production, the induction of over 10 million young men into the armed forces, and the entry of millions of female, young, and elderly workers into the workplace subjected the labor force to large shocks. Also during the 1940s, the wage distribution compressed sharply and the returns to education fell. This paper uses wage changes between occupations to link wartime labor market shocks to the decline in the return to education and the decline in wage inequality. Wartime production favoring semi-skilled labor and the occupation-biased nature of the draft combined to compress both the lower and upper tails of the male wage distribution and the upper portion of the female wage distribution.
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Bibliographic InfoArticle provided by De Gruyter in its journal The B.E. Journal of Economic Analysis & Policy.
Volume (Year): 10 (2010)
Issue (Month): 1 (July)
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Other versions of this item:
- E24 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
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