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The German-Czech Border Region after the Fall of the Iron Curtain : Effects on the Labour Market

  • Moritz, Michael
  • Gröger, Margit

Using the IAB Employment Sample (IABS) covering 1980-2001 we investigate what impact the fall of the Iron Curtain has had on the skill structure of employment and wages in the western German districts neighbouring the Czech Republic. The introduction of free trade in this region, which has one of the world´s largest spatial wage differentials, can be seen as a natural experiment. We presume that changes in skill and wage structures are particularly apparent in the regions situated immediately on the open border. Distinguishing three skill categories we obtain unexpected results. Though we observe a general shift from low-skilled jobs towards skilled jobs and a convergence trend of border regions towards the national average, we do not find a special effect for the period after the opening of the border, neither concerning the skill structure nor the wage differentials.

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Paper provided by Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics in its series Discussion Papers with number 48.

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Date of creation: 2006
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Handle: RePEc:zbw:faulre:48
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  1. Borjas, George J & Ramey, Valerie A, 1995. "Foreign Competition, Market Power, and Wage Inequality," The Quarterly Journal of Economics, MIT Press, vol. 110(4), pages 1075-1110, November.
  2. Niebuhr, Annekatrin, 2005. "The Impact of EU Enlargement on European Border Regions," HWWA Discussion Papers 330, Hamburg Institute of International Economics (HWWA).
  3. Barjak, Franz & Heimpold, Gerhard, 1999. "Development Problems and Policies at the German Border with Poland," ERSA conference papers ersa99pa136, European Regional Science Association.
  4. Niebuhr, Annekatrin, 2004. "Spatial Effects of European Integration : Do Border Regions Benefit Above Average?," HWWA Discussion Papers 307, Hamburg Institute of International Economics (HWWA).
  5. Jim Airola & Chinhui Juhn, 2008. "Wage Inequality in Post-Reform Mexico," Journal of Income Distribution, Journal of Income Distribution, vol. 17(1), pages 110-134, March.
  6. Robert C. Feenstra & Gordon H. Hanson, 1995. "Foreign Direct Investment and Relative Wages: Evidence from Mexico's Maquiladoras," NBER Working Papers 5122, National Bureau of Economic Research, Inc.
  7. Bound, John & Johnson, George, 1992. "Changes in the Structure of Wages in the 1980's: An Evaluation of Alternative Explanations," American Economic Review, American Economic Association, vol. 82(3), pages 371-92, June.
  8. Berman, Eli & Bound, John & Griliches, Zvi, 1994. "Changes in the Demand for Skilled Labor within U.S. Manufacturing: Evidence from the Annual Survey of Manufactures," The Quarterly Journal of Economics, MIT Press, vol. 109(2), pages 367-97, May.
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