IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

The East German Wage Structure after Transition

  • Robert Orlowski
  • Regina T. Riphahn

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 of 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 with significant differences particularly for high skill workers. The results are robust when only individuals are considered who started their labor market career in the market economy. We expect that the different returns are related to the heterogeneity of work experience gathered in East versus West Germany.

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://www.bgpe.de/texte/DP/073_orlowski.pdf
File Function: First version, 2009
Download Restriction: no

Paper provided by Bavarian Graduate Program in Economics (BGPE) in its series Working Papers with number 073.

as
in new window

Length: 41 pages
Date of creation: May 2009
Date of revision:
Handle: RePEc:bav:wpaper:073_orlowski
Contact details of provider: Web page: http://www.bgpe.de/

More information through EDIRC

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. Alexandra Spitz-Oener, 2007. "Human capital, job tasks and technology in East Germany after reunification," National Institute Economic Review, National Institute of Economic and Social Research, vol. 201(1), pages 97-106, July.
  2. Noorkoiv, Rivo & Orazem, Peter F. & Puur, Allan & Vodopivec, Milan, 1997. "How Estonia's economic transition affected employment and wages (1989-95)," Policy Research Working Paper Series 1837, The World Bank.
  3. Völter, Robert & Osikominu, Aderonke & Fitzenberger, Bernd, 2007. "Get Training or Wait? Long-Run Employment Effects of Training Programs for the Unemployed in West Germany," ZEW Discussion Papers 06-39 [rev.], ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  4. Edward J. Bird & Johannes Schwarze & Gert G. Wagner, 1994. "Wage Effects of the Move toward Free Markets in East Germany," ILR Review, Cornell University, ILR School, vol. 47(3), pages 390-400, April.
  5. Dennis J. Snower & Christian Merkl, 2006. "The Caring Hand that Cripples: The East German Labor Market After Reunification (Detailed Version)," Kiel Working Papers 1263, Kiel Institute for the World Economy.
  6. Joseph G. Altonji & Robert A. Shakotko, 1987. "Do Wages Rise with Job Seniority?," Review of Economic Studies, Oxford University Press, vol. 54(3), pages 437-459.
  7. Bernhard Boockmann & Susanne Steffes, 2010. "Workers, Firms, or Institutions: What Determines Job Duration for Male Employees in Germany?," ILR Review, Cornell University, ILR School, vol. 64(1), pages 109-127, October.
  8. Gorodnichenko, Yuriy & Sabirianova Peter, Klara, 2005. "Returns to schooling in Russia and Ukraine: A semiparametric approach to cross-country comparative analysis," Journal of Comparative Economics, Elsevier, vol. 33(2), pages 324-350, June.
  9. Fertig, Michael & Schmidt, Christoph M. & Schneider, Hilmar, 2006. "Active labor market policy in Germany--Is there a successful policy strategy?," Regional Science and Urban Economics, Elsevier, vol. 36(3), pages 399-430, May.
  10. Christian Dustmann & Costas Meghir, 2001. "Wages, experience and seniority," IFS Working Papers W01/01, Institute for Fiscal Studies.
  11. Harmgart, Heike & Jurajda, Stepan, 2004. "When do 'Female' Occupations Pay More?," CEPR Discussion Papers 4270, C.E.P.R. Discussion Papers.
  12. Gernandt, Johannes & Pfeiffer, Friedhelm, 2006. "Rising Wage Inequality in Germany," ZEW Discussion Papers 06-19 [rev.], ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  13. Caliendo Marco & Hujer Reinhard & Thomsen Stephan L., 2006. "Sectoral Heterogeneity in the Employment Effects of Job Creation Schemes in Germany," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 226(2), pages 139-179, April.
  14. Daniel Munich & Jan Svejnar & Daniel Munich, 1999. "Returns to Human Capital under the Communist Wage Grid and During the Transition to a Market Economy," William Davidson Institute Working Papers Series 272, William Davidson Institute at the University of Michigan.
  15. Fleisher, Belton M. & Sabirianova, Klara & Wang, Xiaojun, 2005. "Returns to skills and the speed of reforms: Evidence from Central and Eastern Europe, China, and Russia," Journal of Comparative Economics, Elsevier, vol. 33(2), pages 351-370, June.
  16. Parent, Daniel, 2000. "Industry-Specific Capital and the Wage Profile: Evidence from the National Longitudinal Survey of Youth and the Panel Study of Income Dynamics," Journal of Labor Economics, University of Chicago Press, vol. 18(2), pages 306-23, April.
  17. Cornelia Luchsinger & Rafael Lalive & Jörg Wild, 2003. "Do Wages Rise with Job Seniority? The Swiss Case," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 139(II), pages 207-229, June.
  18. Krueger, Alan B. & Pischke, Jörn-Steffen, 1992. "A comparative analysis of East and West German labor markets before and after unification," ZEW Discussion Papers 92-11, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  19. Michael C. Burda, 2006. "What kind of shock was it? Regional Integration and Structural Change in Germany after Unification," SFB 649 Discussion Papers SFB649DP2006-087, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
  20. Uhlig, Harald, 2008. "The slow decline of East Germany," Journal of Comparative Economics, Elsevier, vol. 36(4), pages 517-541, December.
  21. Harald Uhlig, 2007. "Regional Labor Markets, Network Externalities and Migration: The Case of German Reunification," Kiel Working Papers 1311, Kiel Institute for the World Economy.
  22. Fitzenberger, Bernd & Völter, Robert, 2007. "Long-Run Effects of Training Programs for the Unemployed in East Germany," IZA Discussion Papers 2630, Institute for the Study of Labor (IZA).
  23. Hunt, Jennifer, 1999. "Post-Unification Wage Growth in East Germany," CEPR Discussion Papers 2106, C.E.P.R. Discussion Papers.
  24. Flanagan, Robert J., 1998. "Were communists good human capitalists? The case of the Czech Republic," Labour Economics, Elsevier, vol. 5(3), pages 295-312, September.
  25. Christian Dustmann & Sonia C. Pereira, 2008. "Wage Growth and Job Mobility in the United Kingdom and Germany," ILR Review, Cornell University, ILR School, vol. 61(3), pages 374-393, April.
  26. Christian Dustmann & Johannes Ludsteck & Uta Schönberg, 2009. "Revisiting the German Wage Structure," The Quarterly Journal of Economics, Oxford University Press, vol. 124(2), pages 843-881.
  27. Merkl, Christian & Snower, Dennis J., 2006. "The Caring Hand that Cripples: The East German Labour Market after Reunification," CEPR Discussion Papers 5656, C.E.P.R. Discussion Papers.
  28. Boeri, Tito & Flinn, Christopher J, 1999. "Returns to Mobility in the Transition to a Market Economy," CEPR Discussion Papers 2098, C.E.P.R. Discussion Papers.
  29. Burda, Michael C. & Fuchs-Schündeln, Nikola & Buch, Claudia M. & Sinn, Hans-Werner, 2006. "Factor reallocation in eastern Germany after reunification," Munich Reprints in Economics 19974, University of Munich, Department of Economics.
  30. Finnie, R., 1993. "Tenure Experience, and Men's and Women's Wages: Panel Estimates from the National Longitudinal Survey of Youth," Papers 9305, Laval - Recherche en Politique Economique.
  31. Bernd Görzig & Martin Gornig & Axel Werwatz, 2008. "Firm wage differentiation in Eastern Germany," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 16(2), pages 273-292, 04.
  32. Elke Holst & Dean R. Lillard & Thomas A. DiPrete, 2001. "Proceedings of the 2000 Fourth International Conference of German Socio-Economic Panel Study Users (GSOEP 2000): Editorial Introduction," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 70(1), pages 5-6.
  33. Amy Y. C. Liu, 2006. "Changing wage structure and education in Vietnam, 1992-98," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 14(4), pages 681-706, October.
  34. Christina Gathmann, 2005. "Large The Skill Loss of Older East Germans after Unification," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 125(1), pages 7-16.
  35. Daniela Andren & John S. Earle & Dana Sapatoru, . "The Wage Effects of Schooling under Socialism and in Transition: Evidence from Romania, 1950-2000," Upjohn Working Papers and Journal Articles jse20051, W.E. Upjohn Institute for Employment Research.
  36. Kohaut Susanne & Schnabel Claus, 2003. "Tarifverträge – nein danke!? Ausmaß und Einflussfaktoren der Tarifbindung west- und ostdeutscher Betriebe / Collective Agreements - No Thanks!? Extent and Determinants of Firms’ Bargaining Coverage in," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 223(3), pages 312-331, June.
  37. Wolfgang Franz & Viktor Steiner, 2000. "Wages in the East German Transition Process: Facts and Explanations," German Economic Review, Verein für Socialpolitik, vol. 1(3), pages 241-269, 08.
  38. Jones, Derek C. & Ilayperuma Simon, Kosali, 2005. "Wage determination under plan and early transition: Bulgarian evidence using matched employer-employee data," Journal of Comparative Economics, Elsevier, vol. 33(2), pages 227-243, June.
  39. Kohaut, Susanne & Schnabel, Claus, 2001. "Tarifverträge - nein danke!? Einflussfaktoren der Tarifbindung west- und ostdeutscher Betriebe," Discussion Papers 8, Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
  40. 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(2), pages 1-92.
  41. SOEP Group, 2001. "The German Socio-Economic Panel (GSOEP) after More than 15 Years: Overview," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 70(1), pages 7-14.
  42. Jennifer Hunt, 2006. "Staunching Emigration from East Germany: Age and the Determinants of Migration," Journal of the European Economic Association, MIT Press, vol. 4(5), pages 1014-1037, 09.
  43. Topel, Robert H, 1991. "Specific Capital, Mobility, and Wages: Wages Rise with Job Seniority," Journal of Political Economy, University of Chicago Press, vol. 99(1), pages 145-76, February.
  44. Richard B. Freeman & Lawrence F. Katz, 1995. "Differences and Changes in Wage Structures," NBER Books, National Bureau of Economic Research, Inc, number free95-1, September.
Full references (including those not matched with items on IDEAS)

This item is featured on the following reading lists or Wikipedia pages:

  1. SOEP based publications

When requesting a correction, please mention this item's handle: RePEc:bav:wpaper:073_orlowski. 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: (Rebecca Schrader)

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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.