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Post-Unification Wage Growth in East Germany

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  • Jennifer Hunt

Abstract

Following monetary union with West Germany in 1990, the real wage of East German workers rose 83%. I use the German Socio-Economic Panel data to investigate the determinants of wage growth, and assess whether they are consistent with efficient restructuring. Although job-changing rates were initially high, the share of wage growth that accrued to movers was little higher than in the west, suggesting that the incentives to move were too low. For 1990 to 1991, the biggest gainers were low-wage workers generally, and women and the less-educated specifically. For 1991 to 1996, the biggest gainers were women and the better-educated. © 2000 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology

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File URL: http://www.mitpressjournals.org/doi/pdf/10.1162/rest.2001.83.1.190
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Bibliographic Info

Article provided by MIT Press in its journal The Review of Economics and Statistics.

Volume (Year): 83 (2001)
Issue (Month): 1 (February)
Pages: 190-195

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Handle: RePEc:tpr:restat:v:83:y:2001:i:1:p:190-195

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  1. Tito Boeri & Christopher Flinn, 1997. "Returns to Mobility in the transition to a Market Economy," William Davidson Institute Working Papers Series 108, William Davidson Institute at the University of Michigan.
  2. Karl-Dietrich Bedau, 1996. "Löhne und Gehälter in Ost- und Westdeutschland gleichen sich an, Lohnstückkosten jedoch nicht," DIW Wochenbericht, DIW Berlin, German Institute for Economic Research, vol. 63(8), pages 134-140.
  3. Peter Krause, 1994. "Armut im Wohlstand: Betroffenheit und Folgen," Discussion Papers of DIW Berlin 88, DIW Berlin, German Institute for Economic Research.
  4. Hunt, Jennifer, 1998. "The Transition in East Germany: When is a Ten Point Fall in the Gender Wage Gap Bad News?," CEPR Discussion Papers 1805, C.E.P.R. Discussion Papers.
  5. Burda, Michael C & Mertens, Antje, 1998. "Wages and Worker Displacement in Germany," CEPR Discussion Papers 1869, C.E.P.R. Discussion Papers.
  6. repec:wop:humbsf:1997-77 is not listed on IDEAS
  7. Alan Krueger & Jorn-Steffen Pischke, 1992. "A Comparative Analysis of East and West German Labor Markets: Before and After Unification," Working Papers 686, Princeton University, Department of Economics, Industrial Relations Section..
  8. Wolfgang Scheremet, 1995. "Tarifpolitik in Ostdeutschland: Ausstieg aus dem Lohnverhandlungsmodell der Bundesrepublik Deutschland?," Discussion Papers of DIW Berlin 113, DIW Berlin, German Institute for Economic Research.
  9. David Begg & Richard Portes, 1993. "Eastern Germany since unification: wage subsidies remain a better way," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 1(4), pages 383-400, December.
  10. Boal, William M & Pencavel, John, 1994. "The Effects of Labor Unions on Employment, Wages, and Days of Operation: Coal Mining in West Virginia," The Quarterly Journal of Economics, MIT Press, vol. 109(1), pages 267-98, February.
  11. repec:wop:humbsf:1998-24 is not listed on IDEAS
  12. M. Burda & C. Schmidt, 1997. "Getting Behind The East-West Wage Differential: Theory and Evidence," SFB 373 Discussion Papers 1997,77, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
  13. Edward J. Bird & Johannes Schwarze & Gert Wagner, 1994. "Wage effects of the move toward free markets in East Germany," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 47(3), pages 390-400, April.
  14. Steiner, Viktor & Wagner, Kersten, 1997. "East West German wage convergence - How far have we got?," ZEW Discussion Papers 97-25, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  15. Richard B. Freeman & Lawrence F. Katz, 1995. "Differences and Changes in Wage Structures," NBER Books, National Bureau of Economic Research, Inc, number free95-1.
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