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The East German Wage Structure in the Transition to a Market Economy
Author(s) -
Steiner Viktor,
Bellmann Lutz
Publication year - 1995
Publication title -
labour
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.403
H-Index - 34
eISSN - 1467-9914
pISSN - 1121-7081
DOI - 10.1111/j.1467-9914.1995.tb00192.x
Subject(s) - german , wage , earnings , economics , german economy , distribution (mathematics) , labour economics , estimation , economy , geography , mathematical analysis , mathematics , accounting , archaeology , management
An important question for the development of the East German labour market in the transition to a market economy is whether wage differentials by qualification, industry or region (which were relatively small in the former GDR) adjust to those in market economies which are more in line with differences in productivities and economic conditions. We estimate empirical earnings functions to quantify the contribution of various important factors shaping the earnings distribution in the East German transition process. Estimation is based on the first six waves of the Labour Market Monitor which is a representative panel data set of the East German working‐age population covering the period 1990 to 1992. The specification of the estimated earnings functions is motivated by the various hypotheses of the development of the East German wage structure in the transformation process. Although we find some similarities with the existing wage structure in West Germany, the East German wage structure still differs in some important dimensions.