TY  - JOUR
AU  - Margo,Robert A.
AU  - Finegan,T. Aldrich
TI  - Changes in the Distribution of Wages, 1940-1950: The Public vs. the     Private Sector
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 5389
PY  - 1995
Y2  - December 1995
UR  - http://www.nber.org/papers/w5389
L1  - http://www.nber.org/papers/w5389.pdf
N1  - Author contact info:
Robert A. Margo
Department of Economics
Boston University
270 Bay State Road
Boston, MA 02215
Tel: 617/353-6819
Fax: 617/343-8495
E-Mail: margora@bu.edu

T. Aldrich Finegan
Vanderbilt University
E-Mail: T.Aldrich.Finegan@vanderbilt.edu
AB  - Between 1940 and 1950 wage differentials within and between labor market groups narrowed significantly - the so-called 'Great Compression'.  This paper disaggregates the Great Compression into its public and private components.  Wage compression in the public sector, along with a decline in the pay premia received by public sector workers, explains about 40 percent of aggregate wage compression in the 1940s.  The experience of the 1940s stands in stark contrast with that of the past two decades, in which a rigid public sector wage structure has dampened increases in aggregate wage inequality.
ER  -