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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.

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File URL: http://www.bgpe.de/texte/DP/073_orlowski.pdf
File Function: First version, 2009
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Paper provided by Bavarian Graduate Program in Economics (BGPE) in its series Working Papers with number 073.

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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/

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