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United, yet apart? A note on persistent labour market differences between Western and Eastern Germany

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  • Schnabel, Claus

Abstract

Comparing aggregate statistics and surveying selected empirical studies, this paper shows that the characteristics and results of labour markets in eastern and western Germany have become quite similar in some respects but still differ markedly in others even 25 years after unification. Whereas no substantial differences can be detected in firms' labour demand decisions and in employees' representation via works councils or trade unions, both parts of the country are somewhat apart concerning labour supply behaviour, labour productivity, wages, and bargaining coverage, and they still exhibit substantially different rates of unemployment. These differences may reflect observable and unobservable characteristics of economic actors as well as differences in behaviour, norms, and individuals' attitudes.

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  • Schnabel, Claus, 2015. "United, yet apart? A note on persistent labour market differences between Western and Eastern Germany," FAU Discussion Papers in Economics 03/2015, Friedrich-Alexander University Erlangen-Nuremberg, Institute for Economics.
  • Handle: RePEc:zbw:iwqwdp:032015
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    Cited by:

    1. Genz, Sabrina & Bellmann, Lutz & Matthes, Britta, 2018. "Do German Works Councils Counter or Foster the Implementation of Digital Technologies?," IZA Discussion Papers 11616, Institute for the Study of Labor (IZA).
    2. Fackler, Daniel & Rippe, Lisa, 2016. "Losing work, moving away? Regional mobility after job loss," IWH Discussion Papers 26/2016, Halle Institute for Economic Research (IWH).
    3. Kamila Cygan-Rehm & Daniel Kühnle & Regina T. Riphahn, 2017. "Love your Leave, Don't Leave your Love! Paid Parental Leave and Children's Living Arrangements," CESifo Working Paper Series 6319, CESifo Group Munich.
    4. Cygan-Rehm, Kamila & Kühnle, Daniel & Riphahn, Regina T., 2018. "Paid Parental Leave and Families' Living Arrangements," IZA Discussion Papers 11533, Institute for the Study of Labor (IZA).
    5. Michaela Fuchs, 2016. "Unemployment decline in East Germany: the role of demography," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 36(2), pages 145-168, October.
    6. repec:bla:labour:v:31:y:2017:i:4:p:457-479 is not listed on IDEAS
    7. Pfeifer Christian & Smolny Werner & Wagner Joachim, 2016. "25 Years of German Reunification," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 236(2), pages 153-155, March.
    8. Daniel Fackler & Lisa Rippe, 2016. "Losing Work, Moving away? Regional Mobility after Job Loss," SOEPpapers on Multidisciplinary Panel Data Research 861, DIW Berlin, The German Socio-Economic Panel (SOEP).

    More about this item

    Keywords

    labour market disparities; German unification; transition; Germany;

    JEL classification:

    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
    • P27 - Economic Systems - - Socialist Systems and Transition Economies - - - Performance and Prospects

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