Decomposing the German East–West wage gap | Zendy

Kluge Jan | Zendy; Weber Michael | Zendy

AI Assistant Blog Pricing

Home ZAIA Blog

Open Access

Decomposing the German East–West wage gap

Author(s) -

Kluge Jan,

Weber Michael

Publication year - 2018

Publication title -

economics of transition

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 0.351

H-Index - 51

eISSN - 1468-0351

pISSN - 0967-0750

DOI - 10.1111/ecot.12137

Subject(s) - wage , economics , german , differential (mechanical device) , quarter (canadian coin) , distribution (mathematics) , labour economics , west germany , demographic economics , real wages , geography , mathematical analysis , mathematics , archaeology , aerospace engineering , engineering , economic history

Wages in East Germany are persistently lower than in West Germany. We study the micro‐level determinants of this spatial wage gap, using an Oaxaca–Blinder decomposition and rich linked employer–employee data. In total, up to one half of the aggregate wage differential can be attributed to structural differences in worker, establishment and regional characteristics. Regional price and establishment size differentials alone account for one quarter of the wage gap at the median. Price level differentials are even more relevant towards the top of the wage distribution. Towards the bottom, differences in union coverage become more important. Our findings are quite stable over the period from 1996 to 2010.

The content you want is available to Zendy users.

Already have an account? Click here to sign in.

Having issues? You can contact us here

Accelerating Research