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The East German Wage Structure after Transition

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  • Orlowski, Robert

    ()
    (University of Erlangen-Nuremberg)

  • Riphahn, Regina T.

    ()
    (University of Erlangen-Nuremberg)

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 in 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. The results are robust when only individuals are considered who started their labor market career in the market economy and they hold across skill groups.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3861.

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Length: 32 pages
Date of creation: Dec 2008
Date of revision:
Publication status: published in: Economics of Transition, 2009, 17 (4), 629-659
Handle: RePEc:iza:izadps:dp3861

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

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Cited by:
  1. Zwick, Thomas, 2011. "Seniority wages and establishment characteristics," Labour Economics, Elsevier, vol. 18(6), pages 853-861.
  2. 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.
  3. Jarko Fidrmuc & Matus Senaj, 2012. "Human Capital, Consumption, and Housing Wealth in Transition," Working and Discussion Papers WP 2/2012, Research Department, National Bank of Slovakia.
  4. 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.
  5. Antonczyk, Dirk & Fitzenberger, Bernd & Sommerfeld, Katrin, 2010. "Rising wage inequality, the decline of collective bargaining, and the gender wage gap," Labour Economics, Elsevier, vol. 17(5), pages 835-847, October.
  6. Hanel, Barbara & Riphahn, Regina T., 2011. "The Employment of Mothers: Recent Developments and their Determinants in East and West Germany," IZA Discussion Papers 5752, Institute for the Study of Labor (IZA).
  7. 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.
  8. 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).
  9. Michael Gühne & Gunther Markwardt, 2014. "Lohnunterschiede zwischen Ost- und Westdeutschland: Neue Einsichten," ifo Dresden berichtet, Ifo Institute for Economic Research at the University of Munich, vol. 21(03), pages 37-44, 06.
  10. Lundberg, Shelly, 2010. "Personality and Marital Surplus," IZA Discussion Papers 4945, Institute for the Study of Labor (IZA).
  11. Schwerdt, Guido & Turunen, Jarkko, 2010. "Labor quality growth in Germany," Economics Letters, Elsevier, vol. 108(3), pages 280-282, September.
  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. 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).
  14. 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.
  15. 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.
  16. 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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