Tissue compression is highly variable between different tissues and different
embedding media but generally regarded as being in the 10-15% range for paraffin
wax (if all else is in order, sharp knife, knife angle etc.).
As Gayle pointed out the compression is a result of many factors but a "too
sharp" knife should not be one of them.
One point that should be made is that section compression is only in one plane so
that unless this compression is fully corrected during section mounting, then the
shape of tissue components is distorted chiefly in one direction and any
measurements made will therfore also be affected.
You may want to check in Steedmans Book  "Section Cutting in Microscopy" .
Although published in 1960 (Blackwell Scientific Publications, Oxford), it has a
really nice description of the factors affecting sectioning using various
embedding media.
Barry