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Wage Mobility in East and West Germany

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  • Riphahn, Regina T.

    () (University of Erlangen-Nuremberg)

  • Schnitzlein, Daniel D.

    () (DIW Berlin)

Abstract

This article studies the long run patterns and explanations of wage mobility as a characteristic of regional labor markets. Using German administrative data we describe wage mobility since 1975 in West and since 1992 in East Germany. Wage mobility declined substantially in East Germany in the 1990s and moderately in East and West Germany since the late 1990s. Therefore, wage mobility does not balance recent increases in cross-sectional wage inequality. We apply RIF (recentered influence function) regression based decompositions to measure the role of potential explanatory factors behind these mobility changes. Increasing job stability is an important factor associated with the East German mobility decline.

Suggested Citation

  • Riphahn, Regina T. & Schnitzlein, Daniel D., 2011. "Wage Mobility in East and West Germany," IZA Discussion Papers 6246, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp6246
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    Cited by:

    1. Jantti, Markus & Jenkins, Stephen P., 2013. "Income mobility," ISER Working Paper Series 2013-23, Institute for Social and Economic Research.
    2. Schnitzlein, Daniel D. & Stephani, Jens, 2016. "Locus of Control and low-wage mobility," Journal of Economic Psychology, Elsevier, vol. 53(C), pages 164-177.
    3. Grabka, Markus M., 2015. "Income and Wealth Inequality after the Financial Crisis: The Case of Germany," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 371-390.
    4. Rinawi, Miriam & Backes-Gellner, Uschi, 2015. "Occupational Skills and the Evolution of Wages," Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112801, Verein für Socialpolitik / German Economic Association.
    5. Rothe, Thomas & Giannelli, Gianna C. & Jaenichen, Ursula, 2013. "Doing well in reforming the labour market? Recent trends in job stability and wages in Germany," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79932, Verein für Socialpolitik / German Economic Association.
    6. Schnabel Claus, 2016. "United, Yet Apart? A Note on Persistent Labour Market Differences between Western and Eastern Germany," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 236(2), pages 157-179, March.
    7. Daniel D. Schnitzlein & Jens Stephani, 2013. "Locus of Control and Low-Wage Mobility," SOEPpapers on Multidisciplinary Panel Data Research 589, DIW Berlin, The German Socio-Economic Panel (SOEP).
    8. Aretz, Bodo, 2013. "Gender differences in German wage mobility," ZEW Discussion Papers 13-003, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    9. David Card & Jörg Heining & Patrick Kline, 2013. "Workplace Heterogeneity and the Rise of West German Wage Inequality," The Quarterly Journal of Economics, Oxford University Press, vol. 128(3), pages 967-1015.
    10. Biewen, Martin & Fitzenberger, Bernd & de Lazzer, Jakob, 2017. "Rising wage inequality in Germany: Increasing heterogeneity and changing selection into full-time work," ZEW Discussion Papers 17-048, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    11. Aysit Tansel & Basak Dalgic & Aytekin Guven, 2014. "Wage Inequality and Wage Mobility in Turkey," Koç University-TUSIAD Economic Research Forum Working Papers 1419, Koc University-TUSIAD Economic Research Forum.
    12. Andreas Kappeler & Andrés Fuentes Hutfilter, 2014. "Making Economic Growth more Socially Inclusive in Germany," OECD Economics Department Working Papers 1175, OECD Publishing.
    13. Kai Daniel Schmid & Ulrike Stein, 2013. "Explaining Rising Income Inequality in Germany, 1991-2010," SOEPpapers on Multidisciplinary Panel Data Research 592, DIW Berlin, The German Socio-Economic Panel (SOEP).
    14. Alm Bastian & Engel Dirk & Weyh Antje, 2014. "Does Switching to a Western German Employer Still Pay Off?: An Analysis for Eastern Germany," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 234(5), pages 546-571, October.
    15. Aretz, Bodo & Gürtzgen, Nicole, 2012. "What explains the decline in wage mobility in the German low-wage sector?," ZEW Discussion Papers 12-041, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    16. Eichhorst, Werner & Arni, Patrick & Buhlmann, Florian & Isphording, Ingo E. & Tobsch, Verena, 2015. "Report No. 68: Wandel der Beschäftigung: Polarisierungstendenzen auf dem deutschen Arbeitsmarkt," IZA Research Reports 68, Institute for the Study of Labor (IZA).
    17. Stephani, Jens, 2013. "Does it matter where you work? : employer characteristics and the wage growth of low-wage workers and higher-wage workers," IAB Discussion Paper 201304, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].

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    Keywords

    administrative data; Shorrocks index; transition matrix; inequality; East Germany; Germany; income mobility; earnings mobility; wage mobility;

    JEL classification:

    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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