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A Comparative Analysis of East and West German Labor Markets: Before and After Unification

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Alan B. Krueger
Jorn-Steffen Pischke

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Abstract

In 1988, the wage distribution in East Germany was much more compressed than in West Germany or the U.S. Since the collapse of Communism and unification with West Germany, however, the wage structure in eastern Germany has changed considerably. In particular, wage variation has increased, the payoff to education has decreased somewhat, industry differentials have expanded, and the white collar premium has increased. Although average wage growth has been remarkably high in eastern Germany, individual variation in wage growth is similar to typical western levels. The wage structure of former East Germans who work in western Germany resembles the wage structure of native West Germans in some respects, but their experience-earnings profile is flat.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 4154.

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Date of creation: Aug 1992
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Handle: RePEc:nbr:nberwo:4154

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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. Jean Helwege & Joachim Wagner, 1991. "More on the international similarity of interindustry wage differentials: evidence from the Federal Republic of Germany and the U.S," Finance and Economics Discussion Series 167, Board of Governors of the Federal Reserve System (U.S.).
  2. Bergson, Abram, 1984. "Income Inequality under Soviet Socialism," Journal of Economic Literature, American Economic Association, vol. 22(3), pages 1052-99, September. [Downloadable!] (restricted)
  3. Katharine G. Abraham & Susan N. Houseman, 1993. "Earnings Inequality in Germany," NBER Working Papers 4541, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  4. Abowd, John M & Card, David, 1989. "On the Covariance Structure of Earnings and Hours Changes," Econometrica, Econometric Society, vol. 57(2), pages 411-45, March. [Downloadable!] (restricted)
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  5. George A. Akerlof & Andrew K. Rose & Janet L. Yellen & Helga Hessenius, 1991. "East Germany in from the Cold: The Economic Aftermath of Currency Union," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(1991-1), pages 1-106. [Downloadable!]
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