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The East German Wage Structure after Transition

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  • Robert Orlowski
  • Regina T. Riphahn

Abstract

We extend the literature on transition economies' wage structures by investigating the returns to tenure and experience. This study applies recent panel data and estimation approaches that control for hitherto neglected biases. We compare the life cycle structure of East and West German wages for fulltime employed men in the private sector. The patterns in the returns to seniority are similar for the two regional labor markets. The returns to experience lag behind in the East German labor market, even almost 20 years after unification with significant differences particularly for high skill workers. The results are robust when only individuals are considered who started their labor market career in the market economy. We expect that the different returns are related to the heterogeneity of work experience gathered in East versus West Germany.

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File URL: http://www.bgpe.de/texte/DP/073_orlowski.pdf
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Bibliographic Info

Paper provided by Bavarian Graduate Program in Economics (BGPE) in its series Working Papers with number 073.

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Length: 41 pages
Date of creation: May 2009
Date of revision:
Handle: RePEc:bav:wpaper:073_orlowski

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Keywords: wage structure; life cycle earnings; returns to tenure; returns to experience;

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References

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Citations

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Cited by:
  1. Shelly Lundberg, 2010. "Personality and Marital Surplus," SOEPpapers on Multidisciplinary Panel Data Research 307, DIW Berlin, The German Socio-Economic Panel (SOEP).
  2. Fidrmuc, Jarko & Senaj, Matus, 2012. "Human Capital, Consumption, and Housing Wealth in Transition," Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 62058, Verein für Socialpolitik / German Economic Association.
  3. Barbara Hanel & Regina T. Riphahn, 2010. "The Employment of Mothers - Recent Developments and their Determinants in East and West Germany," CESifo Working Paper Series 3189, CESifo Group Munich.
  4. Robert Orlowski & Regina T. Riphahn, 2009. "Im Osten nichts Neues – Lohnstrukturen knapp 20 Jahre nach dem Mauerfall," ifo Dresden berichtet, Ifo Institute for Economic Research at the University of Munich, vol. 16(03), pages 24-27, 06.
  5. Elke J. Jahn, 2010. "Reassessing the Pay Gap for Temps in Germany," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 230(2), pages 208-233.
  6. Guido Schwerdt & Jarkko Turunen, 2009. "Labor Quality Growth in Germany," Ifo Working Paper Series Ifo Working Paper No. 77, Ifo Institute for Economic Research at the University of Munich.
  7. Wyrwich, Michael, 2013. "Can socioeconomic heritage produce a lost generation with regard to entrepreneurship?," Journal of Business Venturing, Elsevier, vol. 28(5), pages 667-682.
  8. Antonczyk, Dirk & Fitzenberger, Bernd & Sommerfeld, Katrin, 2010. "Rising Wage Inequality, the Decline of Collective Bargaining, and the Gender Wage Gap," IZA Discussion Papers 4911, Institute for the Study of Labor (IZA).
  9. Zwick, Thomas, 2011. "Seniority wages and establishment characteristics," Labour Economics, Elsevier, vol. 18(6), pages 853-861.
  10. Cygan-Rehm, Kamila, 2013. "Earnings-Dependent Parental Leave Benefit and Fertility: Evidence from Germany," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 80021, Verein für Socialpolitik / German Economic Association.
  11. Usamah Fayez Al-Farhan, 2010. "A Detailed Decomposition of Changes in Wage Inequality in Reunified Post-transition Germany 1999-2006: Accounting for Sample Selection," SOEPpapers on Multidisciplinary Panel Data Research 269, DIW Berlin, The German Socio-Economic Panel (SOEP).
  12. Karsten Kohn & Dirk Antonczyk, 2013. "The aftermath of reunification," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 21(1), pages 73-110, 01.
  13. Giorgio Brunello & Elena Crivellaro & Lorenzo Rocco, 2012. "Lost in transition?," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 20(4), pages 637-676, October.
  14. Kohn, Karsten & Antonczyk, Dirk, 2011. "The Aftermath of Reunification: Sectoral Transition, Gender, and Rising Wage Inequality in East Germany," IZA Discussion Papers 5708, Institute for the Study of Labor (IZA).
  15. Zwick, Thomas, 2009. "Why Pay Seniority Wages?," ZEW Discussion Papers 09-005, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.

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