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SAS has the capability to read input files that are in UNIX compressed format (.Z). Within your filename statement you will use a combination of the zcat command paired with the PIPE command. Below is an example that is reading compressed ascii data from the /usr/shared drive.
filename pums90 PIPE 'zcat /usr/shared/sb/mi26.Z'; data hh; infile pums90; input ID 2-8 state $11-12 . . .