Getting behind the East - West
نویسندگان
چکیده
Labor markets are the most important mediator of German uniication and wages are a central indicator of its progress. Starting from the observation that a wage diierential between two workers can arise either because workers have diierent endowments of human capital characteristics or remuneration to these characteristics diier, we apply an Oaxaca-style decomposition to the post-uniication waves of the GSOEP to analyze the extent and causes of the East-West German wage diierential. We derive an empirical spe-ciication allowing us to assess directly whether (i) the initial wage disadvantage of East German workers is increasing in \age at uniication" and (ii) subsequent wage growth is increasing in the time remaining in the labor force. Furthermore, we derive and estimate a measure of East-West wage convergence that accounts for both diierences in human capital endowments and interference generated by the aging process.
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