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The East German Wage Structure after Transition

  • Orlowski, Robert

    ()

    (University of Erlangen-Nuremberg)

  • Riphahn, Regina T.

    ()

    (University of Erlangen-Nuremberg)

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 in 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. The results are robust when only individuals are considered who started their labor market career in the market economy and they hold across skill groups.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3861.

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Length: 32 pages
Date of creation: Dec 2008
Date of revision:
Publication status: published in: Economics of Transition, 2009, 17 (4), 629-659
Handle: RePEc:iza:izadps:dp3861
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