NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Explaining Black-White Wage Convergence, 1940-1950: The Role of the Great Compression

Robert A. Margo

NBER Historical Working Paper No. 44
Issued in March 1993
NBER Program(s):   DAE

The "Great Compression" of the 1940s produced a substantial narrowing in wage differentials in the United States. This paper examines the role of the Great Compression in fostering black-white wage convergence in the 1940s. Using data from the 1940 and 1950 census public use samples, I show that between half and two-thirds of black white wage convergence at the sample means can be attributed to shifts in wage structure associated with the Great Compression. I also demonstrate that, by (temporarily) boosting the incomes of black parents. the Great Compression led to greater increases in schooling levels among black teens between 1940 and 1950 than would have occurred otherwise.

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Document Object Identifier (DOI): 10.3386/h0044

Published: Industrial and Labor Relations Review, vol. 48, April 1995, pp. 470-481

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