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Rising Wage Dispersion, After All! The German Wage Structure at the Turn of the Century

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  • Kohn, Karsten

    (KfW Bankengruppe)

Abstract

Using register data from the IAB employment sample, this paper studies the wage structure in the German labor market throughout the years 1992-2001. Wage dispersion has generally been rising. The increase was more pronounced in East Germany and occurred predominantly in the lower part of the wage distribution for women and in the upper part for men. Censored quantile wage regressions reveal diverse age and skill patterns. Applying Machado/Mata (2005)-type decompositions I conclude that differences in the composition of the work force only had a small impact on the observed wage differentials between East and West Germany, but changes in the characteristics captured better parts of the observed wage changes over time.

Suggested Citation

  • Kohn, Karsten, 2006. "Rising Wage Dispersion, After All! The German Wage Structure at the Turn of the Century," IZA Discussion Papers 2098, IZA Network @ LISER.
    • Handle: RePEc:iza:izadps:dp2098
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    References listed on IDEAS

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    1. Blau, Francine D & Kahn, Lawrence M, 1996. "International Differences in Male Wage Inequality: Institutions versus Market Forces," Journal of Political Economy, University of Chicago Press, vol. 104(4), pages 791-836, August.
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    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models; Threshold Regression Models

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