Advanced Search
MyIDEAS: Login to save this paper or follow this series

On the Post-Unification Development of Public and Private Pay in Germany

Contents:

Author Info

  • Heitmueller, Axel

    ()
    (Cabinet Office, UK)

  • Mavromaras, Kostas G.

    ()
    (NILS, Flinders University)

Abstract

German post-unification in the 1990s is a period that was marked by substantial economic change, part of which was East German wages building towards the much higher West German levels. This paper studies the public-private pay gap in the fast changing economic and political environment of the 1990s using panel estimation techniques which control for unobserved individual heterogeneity. It shows that, while the overall pay gap between public and private sector stayed remarkably constant in the West, earnings differences in the East increased threefold in the late 1990s resulting in a substantial wage premium in the public sector. It is suggested that this premium is a result of the politically induced gap between pay and actual productivity. Furthermore, results vary greatly by gender indicating significantly larger female earnings differentials. Several institutional and political arguments are presented to explain this phenomenon.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://ftp.iza.org/dp1696.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1696.

as in new window
Length: 21 pages
Date of creation: Jul 2005
Date of revision:
Publication status: published in: Manchester School, 2007, 75 (4), 422–444
Handle: RePEc:iza:izadps:dp1696

Contact details of provider:
Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org

Order Information:
Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Email:

Related research

Keywords: public-private sector pay differential; decomposition; Germany;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

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.:
as in new window
  1. Dustmann, C. & van Soest, A., 1997. "Public and Private Sector Wages of Male Workers in Germany," Economics Working Papers, European University Institute eco97/13, European University Institute.
  2. Oaxaca, Ronald L. & Ransom, Michael R., 1994. "On discrimination and the decomposition of wage differentials," Journal of Econometrics, Elsevier, Elsevier, vol. 61(1), pages 5-21, March.
  3. Dustmann, C. & Soest, A.H.O. van, 1997. "Wage structures in the private and public sectors in West Germany," Open Access publications from Tilburg University, Tilburg University urn:nbn:nl:ui:12-74120, Tilburg University.
  4. Jennifer Hunt, 1998. "Post-Unification Wage Growth in East Germany," William Davidson Institute Working Papers Series, William Davidson Institute at the University of Michigan 304, William Davidson Institute at the University of Michigan.
  5. Andrew Henley & Dennis Thomas, 2001. "Public Service Employment and the Public- Private Wage Differential in British Regions," Regional Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 35(3), pages 229-240.
  6. Heitmueller, Axel, 2005. "A Note on Decompositions in Fixed Effects Models in the Presence of Time-Invariant Characteristics," IZA Discussion Papers 1886, Institute for the Study of Labor (IZA).
  7. Michael C. Burda & Christoph M. Schmitd, 1997. "Getting Behind the East-West [German] Wage Differential: Theory and Evidence," William Davidson Institute Working Papers Series, William Davidson Institute at the University of Michigan 105, William Davidson Institute at the University of Michigan.
  8. Hartog, Joop & Oosterbeek, Hessel, 1993. "Public and private sector wages in the Netherlands," European Economic Review, Elsevier, Elsevier, vol. 37(1), pages 97-114, January.
  9. Hans-Werner Sinn, 1995. "Staggering along: wages policy and investment support in East Germany," The Economics of Transition, The European Bank for Reconstruction and Development, The European Bank for Reconstruction and Development, vol. 3(4), pages 403-426, December.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Robert Orlowski & Regina T. Riphahn, 2007. "Seniority in Germany: New Evidence on Returns to Tenure for Male Full-time Workers," Working Papers, Bavarian Graduate Program in Economics (BGPE) 036, Bavarian Graduate Program in Economics (BGPE).
  2. repec:iab:iabzaf:v:41:i:2/3:p:139-155 is not listed on IDEAS

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp1696. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.