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LABOR EARNINGS AND HOUSEHOLD INCOME MOBILITY IN REUNIFIED GERMANY: A COMPARISON OF THE EASTERN AND WESTERN STATES
Author(s) -
Hauser Richard,
Fabig Holger
Publication year - 1999
Publication title -
review of income and wealth
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.024
H-Index - 57
eISSN - 1475-4991
pISSN - 0034-6586
DOI - 10.1111/j.1475-4991.1999.tb00342.x
Subject(s) - earnings , economics , labor mobility , convergence (economics) , demographic economics , net income , german , labour economics , net national income , income distribution , social mobility , panel study of income dynamics , panel data , gross income , geography , economic growth , econometrics , political science , public economics , mathematical analysis , mathematics , accounting , archaeology , finance , tax reform , inequality , law , state income tax
Using data from the German Socio‐Economic Panel, we compare income mobility of persons from the eastern and western states of Germany between 1990 and 1995. We consider income mobility between consecutive years and between the first and the final year of this time period. We find that gross individual labor income mobility was much higher in the east than in the west during the first years after reunification, but that this difference has become much smaller until 1995. Changing to measures that reflect economic well‐being more accurately, we observe that gross equivalent labor income mobility and net equivalent income mobility initially were also much higher in the eastern states than in the western states, but converged over time as well. This convergence has been particularly strong for net equivalent income mobility, suggesting that the social protection system has greatly reduced mobility risks associated with the transformation process in the eastern states of Germany.