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The Transition in East Germany: When is a Ten Point Fall in the Gender Wage Gap Bad News?

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Author Info
Hunt, Jennifer

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Abstract

Since monetary union with West Germany on 1 July 1990, eastern female monthly wages have risen by 10 percentage points relative to male wages, but female employment has fallen 5 percentage points more than male employment. Using the German Socio-Economic Panel to study the years 1990–94, I show that along with age, the wage of a worker in 1990 is the most important determinant of the hazard rate from employment. Differences in mean 1990 wages explain more than one-half of the gender gap in this hazard rate, since low earners were more likely to leave employment, and were disproportionately female. The withdrawal from employment of low earners can explain 80% of the rise in relative female wages. There is no evidence that reduction in child care availability is a major factor in reducing female employment rates.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 1805.

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Date of creation: Mar 1998
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Handle: RePEc:cpr:ceprdp:1805

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Related research
Keywords: Employment; Gender Discrimination; Transition; Wages;

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Find related papers by JEL classification:
J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
J7 - Labor and Demographic Economics - - Labor Discrimination
P5 - Economic Systems - - Comparative Economic Systems

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  1. Peter Krause, 1994. "Armut im Wohlstand: Betroffenheit und Folgen," Discussion Papers of DIW Berlin 88, DIW Berlin, German Institute for Economic Research.
  2. M. Burda & C. Schmidt, . "Getting Behind The East-West Wage Differential: Theory and Evidence," Sonderforschungsbereich 373 1997-77, Humboldt Universitaet Berlin.
  3. Blau, Francine D & Kahn, Lawrence M, 1997. "Swimming Upstream: Trends in the Gender Wage Differential in 1980s," Journal of Labor Economics, University of Chicago Press, vol. 15(1), pages 1-42, January. [Downloadable!] (restricted)
  4. Alan B. Krueger & Jorn-Steffen Pischke, 1992. "A Comparative Analysis of East and West German Labor Markets: Before and After Unification," NBER Working Papers 4154, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  5. Begg, David & Portes, Richard, 1992. "Eastern Germany Since Unification: Wage Subsidies Remain a Better Way," CEPR Discussion Papers 730, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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