Project Details
Projekt
Decreasing Wage Mobility in the Low-Wage Sector - Increasing Genuine State Dependence or Composition Effects?
Subject Area
Economic Theory
Term
from 2011 to 2017
Project identifier
Deutsche Forschungsgemeinschaft (DFG) - Project number 193594582
While much of the empirical evidence on wage inequality and mobility in Eastern Germany has focused on the evolution of wages after unification, much less work has provided evidence on the pre-unification period. Against this background, this project aims to study wage mobility in Eastern Germany before unification and during the transition from a centrally planned to a market economy. Particular emphasis is given to the question of whether the transition from a centrally planned to a market economy offers fundamentally new perspectives for those who, in economic terms, were relatively deprived under the old regime. Previous empirical research on this question has been limited by the availability of suitable representative longitudinal micro-data that are able to track individuals' labour market careers across different political and economic regimes. We exploit German pension register data that recently have become available and provide full pre- and post-unification longitudinal information on the pension-relevant biographies of a 1%-sample of individuals aged 15 to 67 up to the year 2007. We then proceed to ask as to how workers' low or high-wage status determines their wage and labour market status after the transition. Of particular interest is the extent of genuine state dependence of GDR low-wage employment in the pre-unification period as well as during and after the transition from a centrally planned to a market economy.
DFG Programme
Research Grants
