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The Separation and Reunification of Germany : Rethinking a Natural Experiment Interpretation of the Enduring Effects of Communism

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  • Becker, Sascha O.

    (Monash University, University of Warwick, CEPR, CESifo, IZA, CAGE, and ROA)

  • Mergele, Lukas

    (ifo Institute at the University of Munich, CESifo)

  • Woessmann, Ludger

    (University of Munich and ifo Institute, CESifo, IZA, CAGE, and ROA)

Abstract

German separation in 1949 into a communist East and a capitalist West and their reunification in 1990 are commonly described as a natural experiment to study the enduring effects of communism. We show in three steps that the populations in East and West Germany were far from being randomly selected treatment and control groups. First, the later border is already visible in many socio-economic characteristics in pre-World War II data. Second, World War II and the subsequent occupying forces affected East and West differently. Third, a selective fifth of the population fled from East to West Germany before the building of the Wall in 1961. In light of our findings, we propose a more cautious interpretation of the extensive literature on the enduring effects of communist systems on economic outcomes, political preferences,cultural traits, and gender roles. JEL codes: D72 ; H11 ; P26 ; P36 ; N44

Suggested Citation

  • Becker, Sascha O. & Mergele, Lukas & Woessmann, Ludger, 2020. "The Separation and Reunification of Germany : Rethinking a Natural Experiment Interpretation of the Enduring Effects of Communism," The Warwick Economics Research Paper Series (TWERPS) 1255, University of Warwick, Department of Economics.
  • Handle: RePEc:wrk:warwec:1255
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    References listed on IDEAS

    as
    1. Sascha O. Becker & Ludger Woessmann, 2009. "Was Weber Wrong? A Human Capital Theory of Protestant Economic History," The Quarterly Journal of Economics, Oxford University Press, vol. 124(2), pages 531-596.
    2. Nicola Fuchs-Schündeln & Paolo Masella, 2016. "Long-Lasting Effects of Socialist Education," The Review of Economics and Statistics, MIT Press, vol. 98(3), pages 428-441, July.
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    26. Quentin Lippmann & Alexandre Georgieff & Claudia Senik, 2019. "Undoing Gender with Institutions. Lessons from the German Division and Reunification," SOEPpapers on Multidisciplinary Panel Data Research 1031, DIW Berlin, The German Socio-Economic Panel (SOEP).
    27. Sascha O. Becker & Ludger Woessmann, 2008. "Luther and the Girls: Religious Denomination and the Female Education Gap in Nineteenth‐century Prussia," Scandinavian Journal of Economics, Wiley Blackwell, vol. 110(4), pages 777-805, December.
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    Cited by:

    1. Laliotis, I. & Minos, D., 2020. "Spreading the Disease: The Role of Culture," Working Papers 20/12, Department of Economics, City University London.
    2. Richard Bluhm & Maxim L. Pinkovskiy, 2020. "The Spread of COVID-19 and the BCG Vaccine: A Natural Experiment in Reunified Germany," Staff Reports 926, Federal Reserve Bank of New York.
    3. Max Deter, 2020. "Are the Losers of Communism the Winners of Capitalism? The Effects of Conformism in the GDR on Transition Success," SOEPpapers on Multidisciplinary Panel Data Research 1102, DIW Berlin, The German Socio-Economic Panel (SOEP).
    4. Pyle, William, 2020. "Russians’ "impressionable years" : life experience during the exit from communism and Putin-era beliefs," BOFIT Discussion Papers 17/2020, Bank of Finland, Institute for Economies in Transition.
    5. Feld, Lars P. & Fuest, Clemens & Haucap, Justus & Schweitzer, Heike & Wieland, Volker & Wigger, Berthold U., 2020. "30 Jahre Wiedervereinigung: Mehr Mut zur Vielfalt," Argumente zur Marktwirtschaft und Politik 153, Stiftung Marktwirtschaft / The Market Economy Foundation, Berlin.
    6. Luis Martinez & Jonas Jessen & Guo Xu, 2020. "A Glimpse of Freedom: Allied Occupation and Political Resistance in East Germany," Empirical Studies of Conflict Project (ESOC) Working Papers 18, Empirical Studies of Conflict Project.
    7. William Pyle, 2020. "Russians' "Impressionable Years": Life Experience during the Exit from Communism and Putin-Era Beliefs," CESifo Working Paper Series 8379, CESifo.
    8. Laliotis, Ioannis & Minos, Dimitrios, 2020. "Spreading the disease: The role of culture," SocArXiv z4ndc, Center for Open Science.

    More about this item

    Keywords

    political systems ; communism ; preferences ; culture ; Germany;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • P26 - Economic Systems - - Socialist Systems and Transition Economies - - - Political Economy
    • P36 - Economic Systems - - Socialist Institutions and Their Transitions - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty
    • N44 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Europe: 1913-

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