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Bye Bye, G.I. - The Impact of the U.S. Military Drawdown on Local German Labor Markets

  • Jan Peter aus dem Moore
  • Alexandra Spitz-Oener

What is the impact of a local negative demand shock on local labor markets? We exploit the unique natural experiment provided by the drawdown of U.S. military forces in West Germany after the end of the Cold War to investigate this question. We find persistent negative effects of the reduction in the U.S. forces on private sector employment, with con- siderable heterogeneity in terms of age and education groups, and sectors. In addition, the U.S. forces reduction resulted in a rise in local unemployment, whereas migration patterns and wages were not affected.

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Paper provided by Sonderforschungsbereich 649, Humboldt University, Berlin, Germany in its series SFB 649 Discussion Papers with number SFB649DP2012-024.

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Length: 54 pages
Date of creation: Mar 2012
Date of revision:
Handle: RePEc:hum:wpaper:sfb649dp2012-024
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