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Do the Best Go West?: An Analysis of the Self-Selection of Employed East-West Migrants in Germany

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Author Info
Herbert Brücker
Parvati Trübswetter

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Abstract

Since the inequality of earnings in East Germany has approached West German levels in the late 1990s, the standard Roy model predicts that a positive selection bias of East-West migrants should disappear. Using a switching regression model and data from the IAB-employment sample, we find however that employed East-West migrants remain positively self-selected with respect to unobserved abilities. This result is consistent with the predictions of our extended Roy model which considers moving costs that are negatively correlated with labour market abilities of individuals. Moreover, we find that wage differentials as well as differences in employment opportunities are the central forces which drive East-West migration after unification.

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Paper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 396.

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Length: 40 p.
Date of creation: 2004
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Handle: RePEc:diw:diwwpp:dp396

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Related research
Keywords: Migration; Self-selection; East Germany;

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Find related papers by JEL classification:
R23 - Urban, Rural, and Regional Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
J61 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Geographic Labor Mobility; Immigrant Workers
P23 - Economic Systems - - Socialist Systems and Transition Economies - - - Factor and Product Markets; Industry Studies; Population

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Willis, Robert J & Rosen, Sherwin, 1979. "Education and Self-Selection," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages S7-36, October. [Downloadable!] (restricted)
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  2. James J. Heckman, 1976. "The Common Structure of Statistical Models of Truncation, Sample Selection and Limited Dependent Variables and a Simple Estimator for Such Models," NBER Chapters, in: Annals of Economic and Social Measurement, Volume 5, number 4, pages 120-137 National Bureau of Economic Research, Inc. [Downloadable!]
  3. Jennifer Hunt, 2000. "Why Do People Still Live in East Germany?," Discussion Papers of DIW Berlin 201, DIW Berlin, German Institute for Economic Research. [Downloadable!]
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  4. Heckman, James J & Sedlacek, Guilherme, 1985. "Heterogeneity, Aggregation, and Market Wage Functions: An Empirical Model of Self-selection in the Labor Market," Journal of Political Economy, University of Chicago Press, vol. 93(6), pages 1077-1125, December. [Downloadable!] (restricted)
  5. Heckman, James J & Honore, Bo E, 1990. "The Empirical Content of the Roy Model," Econometrica, Econometric Society, vol. 58(5), pages 1121-49, September. [Downloadable!] (restricted)
  6. Jasso, Guillermina & Rosenzweig, Mark R, 1990. "Self-Selection and the Earnings of Immigrants: Comment," American Economic Review, American Economic Association, vol. 80(1), pages 298-304, March.
  7. Burda, Michael C., 1993. "The determinants of East-West German migration: Some first results," European Economic Review, Elsevier, vol. 37(2-3), pages 452-461, April. [Downloadable!] (restricted)
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  8. Michael C. Burda & Wolfgang Härdle & Marlene Müller & Axel Werwatz, 1998. "Semiparametric analysis of German East-West migration intentions: facts and theory," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 13(5), pages 525-541. [Downloadable!]
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  9. Michael C. Burda & Jennifer Hunt, 2001. "From Reunification to Economic Integration: Productivity and the Labor Market in Eastern Germany," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 32(2001-2), pages 1-92. [Downloadable!]
  10. Borjas, George J, 1987. "Self-Selection and the Earnings of Immigrants," American Economic Review, American Economic Association, vol. 77(4), pages 531-53, September. [Downloadable!] (restricted)
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  11. Chiswick, Barry R., 2000. "Are Immigrants Favorably Self-Selected? An Economic Analysis," IZA Discussion Papers 131, Institute for the Study of Labor (IZA). [Downloadable!]
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Dennis J. Snower & Christian Merkl, 2006. "The Caring Hand that Cripples: The East German Labor Market After Reunification (Detailed Version)," IZA Discussion Papers 2066, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  2. Björn Alecke & Timo Mitze & Gerhard Untiedt, 2009. "Internal Migration, Regional Labour Market Dynamics and Implications for German East-West Disparities – Results from a Panel VAR," Ruhr Economic Papers 0096, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen. [Downloadable!]
  3. Johannes Gernandt & Friedhelm Pfeiffer, 2008. "Wage Convergence and Inequality after Unification: (East) Germany in Transition," SOEPpapers 107, DIW Berlin, The German Socio-Economic Panel (SOEP). [Downloadable!]
    Other versions:
  4. Herbert Brücker & Elke J. Jahn, 2009. "Migration and Wage-Setting: Reassessing the Labor Market Effects of Migration," Kiel Working Papers 1502, Kiel Institute for the World Economy. [Downloadable!]
  5. Carsten Ochsen, 2009. "Regional Labor Markets and Aging in Germany," Thuenen-Series of Applied Economic Theory 102, University of Rostock, Institute of Economics, Germany. [Downloadable!]
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