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War Mobilization and the Great Compression


  • Scotese Carol A.

    () (Virginia Commonwealth University)


During 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.

Suggested Citation

  • Scotese Carol A., 2010. "War Mobilization and the Great Compression," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-29, July.
  • Handle: RePEc:bpj:bejeap:v:10:y:2010:i:1:n:62

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    References listed on IDEAS

    1. Claudia Goldin & Robert A. Margo, 1992. "The Great Compression: The Wage Structure in the United States at Mid-Century," The Quarterly Journal of Economics, Oxford University Press, vol. 107(1), pages 1-34.
    2. repec:hrv:faseco:30703979 is not listed on IDEAS
    3. DiNardo, John & Fortin, Nicole M & Lemieux, Thomas, 1996. "Labor Market Institutions and the Distribution of Wages, 1973-1992: A Semiparametric Approach," Econometrica, Econometric Society, vol. 64(5), pages 1001-1044, September.
    4. Maloney, Thomas N., 1994. "Wage Compression and Wage Inequality Between Black and White Males in the United States, 1940–1960," The Journal of Economic History, Cambridge University Press, vol. 54(02), pages 358-381, June.
    5. Robert A. Margo, 1995. "Explaining Black-White Wage Convergence, 1940–1950," ILR Review, Cornell University, ILR School, vol. 48(3), pages 470-481, April.
    6. Higgs, Robert, 1999. "From Central planning to the Market: The American Transition, 1945–1947," The Journal of Economic History, Cambridge University Press, vol. 59(03), pages 600-623, September.
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