Post-Unification Wage Growth in East Germany

Working Paper No. 6878

Posted: 18 Jun 1999

See all articles by Jennifer Hunt

Jennifer Hunt

McGill University - Department of Economics; Rutgers University; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: January 1999

Abstract

Following monetary union with west Germany in June 1990, the median real monthly wage of prime age east German workers rose by 83% in six years. I use the German Socio-Economic Panel data to investigate the determinants of this wage growth and some of its implications. For the 1990-1991 period I find that the biggest gainers were low-wage workers generally, and women and the less educated specifically. In the 1991-1996 period the biggest gainers were women and the better educated. Job changing rates were high; a majority of workers had changed jobs by 1996. The return to job changing, particularly changing to a job in the west, was high in 1990-1991 but fell greatly in the later period, so that overall only 18% of wage growth was due to job changing within the east, and 7% to east-west job changing.

JEL Classification: J3, P2

Suggested Citation

Hunt, Jennifer and Hunt, Jennifer, Post-Unification Wage Growth in East Germany (January 1999). Working Paper No. 6878, Available at SSRN: https://ssrn.com/abstract=146933

Jennifer Hunt (Contact Author)

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