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Participation Behavior of East German Women after German Unification

  • Holger Bonin


  • Rob Euwals


The paper studies the determinants of labor force participation by East German women after unification. To isolate the role of preferences on labor force participation from individual characteristics, we develop a panel data model that simultaneously explains participation, employment, and wages. The model, estimated for East and West Germany on the basis of the German Socio-Economic Panel, indicates that distinct preferences could explain the regional difference in participation rates at unification. Afterward East German women became less willing to participate, but the negative participation trend was offset on the aggregate level by changes in characteristics and wages promoting participation.

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Paper provided by William Davidson Institute at the University of Michigan in its series William Davidson Institute Working Papers Series with number 477.

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Length: 35 pages
Date of creation: 01 Jul 2002
Date of revision:
Handle: RePEc:wdi:papers:2002-477
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  1. Jennifer Hunt, 1999. "Determinants of Non-employment and Unemployment Durations in East Germany," NBER Working Papers 7128, National Bureau of Economic Research, Inc.
  2. Chase, R.S., 1995. "Women's Labor Force Participation During and After Communism: A Case Study of the Czech Republic and Slovakia," Papers 768, Yale - Economic Growth Center.
  3. Ruth Grunert, 2000. "Bei Annährung weiterhin Besonderheiten der Konsumstruktur in Ostdeutschland," Wirtschaft im Wandel, Halle Institute for Economic Research, vol. 6(7), pages 204-209.
  4. Jennifer Hunt, 2002. "The Transition in East Germany: When Is a Ten-Point Fall in the Gender Wage Gap Bad News?," Journal of Labor Economics, University of Chicago Press, vol. 20(1), pages 148-169, January.
  5. Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, vol. 47(1), pages 153-61, January.
  6. Bonin, Holger & Zimmermann, Klaus F., 2000. "The Post-Unification German Labor Market," IZA Discussion Papers 185, Institute for the Study of Labor (IZA).
  7. Gronau, Reuben, 1974. "Wage Comparisons-A Selectivity Bias," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1119-43, Nov.-Dec..
  8. Richard V. Burkhauser & Michaela Kreyenfeld & Gert G. Wagner, 1997. "The German Socio-Economic Panel: A Representative Sample of Reunited Germany and its Parts," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 66(1), pages 7-16.
  9. Franz, Wolfgang & Steiner, Viktor, 1999. "Wages in the East German transition process: facts and explanations," ZEW Discussion Papers 99-40, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  10. Tito Boeri, 1999. "Transition with Labour Supply," William Davidson Institute Working Papers Series 274, William Davidson Institute at the University of Michigan.
  11. Poirier, Dale J., 1980. "Partial observability in bivariate probit models," Journal of Econometrics, Elsevier, vol. 12(2), pages 209-217, February.
  12. Svejnar, Jan, 1999. "Labor markets in the transitional Central and East European economies," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 42, pages 2809-2857 Elsevier.
  13. Cragg, John G, 1971. "Some Statistical Models for Limited Dependent Variables with Application to the Demand for Durable Goods," Econometrica, Econometric Society, vol. 39(5), pages 829-44, September.
  14. Blundell, Richard & Ham, John & Meghir, Costas, 1987. "Unemployment and Female Labour Supply," Economic Journal, Royal Economic Society, vol. 97(388a), pages 44-64, Supplemen.
  15. Lechner, Michael, 1997. "Eine empirische Analyse der Geburtenentwicklung in den neuen Bundesländern," Discussion Papers 551, Institut fuer Volkswirtschaftslehre und Statistik, Abteilung fuer Volkswirtschaftslehre.
  16. Gourieroux, Christian & Monfort, Alain, 1993. "Simulation-based inference : A survey with special reference to panel data models," Journal of Econometrics, Elsevier, vol. 59(1-2), pages 5-33, September.
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