10:00 - 11:30
Evolution of the Wage Structure in East Germany
We analyze the evolution of the wage and employment structure in East Germany over the past two decades and compare it to West Germany.
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Christina Gathmann joined Heidelberg University as full Professor of Labor Economics and Political Economy at the Alfred-Weber-Institute for Economics in 2011. Since 2013 she is a member of the Board of Academic Advisors to the Federal Ministry of Economics and Technology, Berlin. She is also a research fellow at CESifo, the Institute for the Study of Labor (IZA) and the Center for European Economic Research (ZEW) and Associate Editor of the European Economic Review. After having obtained her Ph.D. from the University of Chicago in 2004, she moved to Stanford University as a Postdoctoral Fellow and a National Fellow at the Hoover Institution. In 2009, she returned to Germany as an assistant professor at the University of Mannheim. Her research focuses on public economics, labor economics, policy evaluation, migration and political economy.
We analyze the evolution of the wage and employment structure in East Germany over the past two decades and compare it to West Germany. Our results suggest that wage inequality in the East exceeds that in the West, especially at the top of the wage distribution. We also show that wage inequality is no longer rising in Germany and even declining in East Germany after 2009. Third, unemployment rates have been declining drastically over the past decade in all of Germany but even more so in East Germany. Changes along the supply side seem to play some role for the evolution of wages, especially in the 1990s. Yet, institutional changes, esp. the introduction of sectoral minimum wages, are the main explanation for the recent declines in wage inequality in East Germany; in West Germany in turn, demand shifts and esp. routinization are important factors to explain recent wage changes.
