Are the Supporters of Socialism the Losers of Capitalism? Conformism in East Germany and Transition Success

Max Deter () and Martin Lange

No 9492, CESifo Working Paper Series from CESifo

Abstract: The empirical literature is inconclusive about whether a country’s democratization goes hand in hand with a reallocation of economic resources. With newly available individual-level data of former residents of the socialist German Democratic Republic (GDR), we analyse how supporters and opponents of the socialist system performed within the market-based democracy of West Germany after reunification. Protesters, those who helped to overthrow the socialist regime in the Peaceful Revolution show higher life satisfaction and better labor market outcomes in the new economic system. Former members of the ruling socialist party and employees in state-supervised sectors become substantially less satisfied. These results do not seem to be driven by individual reactions to the transition, but rather by the removal of discriminatory practices in the GDR. Additional results indicate that conformism in the GDR also explains political preferences over the almost three decades after the reunification of Germany.

Keywords: East Germany; state socialism; transition; labor market; life satisfaction (search for similar items in EconPapers)
JEL-codes: D31 H10 N44 P20 (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-eur, nep-his, nep-hme, nep-lab and nep-tra
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Related works:
Journal Article: Are the supporters of socialism the losers of capitalism? Conformism in East Germany and transition success (2023)
Working Paper: Are the supporters of socialism the losers of capitalism? Conformism in East Germany and transition success (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_9492

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