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The Transition in East Germany: When is a Ten Point Fall in the Gender Wage Gap Bad News?

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  • Jennifer Hunt

Abstract

Since monetary union with West Germany on 1 July 1990, eastern female monthly wages have risen by 10 percentage points relative to male wages, but female employment has fallen 5 percentage points more than male employment. Using the German Socio-Economic Panel to study the years 1990–94, I show that along with age, the wage of a worker in 1990 is the most important determinant of the hazard rate from employment. Differences in mean 1990 wages explain more than one-half of the gender gap in this hazard rate, since low earners were more likely to leave employment, and were disproportionately female. The withdrawal from employment of low earners can explain 80% of the rise in relative female wages. There is no evidence that reduction in child care availability is a major factor in reducing female employment rates.
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  • Jennifer Hunt, 1997. "The Transition in East Germany: When is a Ten Point Fall in the Gender Wage Gap Bad News?," Discussion Papers of DIW Berlin 156, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwwpp:dp156
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    References listed on IDEAS

    as
    1. Jennifer Hunt, 2001. "Post-Unification Wage Growth in East Germany," The Review of Economics and Statistics, MIT Press, vol. 83(1), pages 190-195, February.
    2. Alan B. Krueger & Jorn-Steffen Pischke, 1995. "A Comparative Analysis of East and West German Labor Markets: Before and After Unification," NBER Chapters, in: Differences and Changes in Wage Structures, pages 405-446, National Bureau of Economic Research, Inc.
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    7. Licht, Georg & Steiner, Viktor, 1992. "Where have all the workers gone? Employment termination in East Germany after unification," ZEW Discussion Papers 92-12, ZEW - Leibniz Centre for European Economic Research.
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    More about this item

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J7 - Labor and Demographic Economics - - Labor Discrimination
    • P5 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems

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