War Mobilization and the Great Compression

Carol Scotese ()
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Carol Scotese: Department of Economics, VCU School of Business

No 901, Working Papers from VCU School of Business, Department of Economics

Abstract: During the 1940s, the diversion of 55\% of the workforce to war-time 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 workplace subject the labor force to large shocks. Also during the 1940s the wage distribution compressed sharply and the returns to education fell. This paper uses between occupation wage changes to link war-time labor market shocks to the decline in the return to education and to the decline in wage inequality. War-time production favoring less-educated labor along with 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.

Keywords: wage inequality; war mobilization; occupation skill (search for similar items in EconPapers)
JEL-codes: E24 J21 J31 (search for similar items in EconPapers)
Pages: 67 pages
Date: 2009-02
New Economics Papers: this item is included in nep-his, nep-lab and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:vcu:wpaper:0901

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