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Post-Unification Wage Growth in East Germany

  • Hunt, Jennifer

Following monetary union with west Germany in June 1990 the median real monthly wage of prime age east German workers rose by 83% in six years. I use the German Socio-Economic Panel data to investigate the determinants of this wage growth and some of its implications. For the 1990-1991 period I find that the biggest gainers were low-wage workers generally, and women and the less educated specifically. In the 1991-1996 period the biggest gainers were women and the better educated. Job changing rates were high: a majority of workers had changed jobs by 1996. The return to job changing, particularly changing to a job in the west, was high in 1990-1991 but fell greatly in the later period, so that overall only 18% of wage growth was due to job changing within the east, and 7% to east-west job changing.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 2106.

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Date of creation: Mar 1999
Date of revision:
Handle: RePEc:cpr:ceprdp:2106
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  1. Boeri, Tito & Flinn, Christopher J., 1997. "Returns to Mobility in the Transition to a Market Economy," Working Papers 97-41, C.V. Starr Center for Applied Economics, New York University.
  2. repec:oup:qjecon:v:109:y:1994:i:1:p:267-98 is not listed on IDEAS
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  4. Hunt, Jennifer, 1998. "The Transition in East Germany: When is a Ten Point Fall in the Gender Wage Gap Bad News?," CEPR Discussion Papers 1805, C.E.P.R. Discussion Papers.
  5. Alan Krueger & Jorn-Steffen Pischke, 1992. "A Comparative Analysis of East and West German Labor Markets: Before and After Unification," Working Papers 686, Princeton University, Department of Economics, Industrial Relations Section..
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  8. Begg, David & Portes, Richard, 1992. "Eastern Germany Since Unification: Wage Subsidies Remain a Better Way," CEPR Discussion Papers 730, C.E.P.R. Discussion Papers.
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  11. Edward J. Bird & Johannes Schwarze & Gert Wagner, 1994. "Wage effects of the move toward free markets in East Germany," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 47(3), pages 390-400, April.
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  13. Richard B. Freeman & Lawrence F. Katz, 1995. "Differences and Changes in Wage Structures," NBER Books, National Bureau of Economic Research, Inc, number free95-1, December.
  14. Peter Krause, 1994. "Armut im Wohlstand: Betroffenheit und Folgen," Discussion Papers of DIW Berlin 88, DIW Berlin, German Institute for Economic Research.
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