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Does Switching to a Western German Employer Still Pay Off?: An Analysis for Eastern Germany

Bastian Alm, Dirk Engel and Weyh Antje ()
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Weyh Antje: Institute for Employment Research (IAB), IAB Regional Saxony, Paracelsusstraße 12, 09114 Chemnitz, Germany

Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), 2014, vol. 234, issue 5, 546-571

Abstract: This paper deals with the medium-term effects of job mobility on the average wage growth of job-movers in eastern Germany. The analysis is based on all employees subject to social insurance contributions working in eastern Germany in 2004. Using a statistical matching procedure combined with a difference-in-differences estimator, we observe that job-movers achieve an average annual wage increase of 2.68% between 2004 and 2009, which is significantly higher than the annual wage growth of selected non-movers (1.34 %). The finding is very robust against changes in the matching procedure. The positive wage differential due to changing jobs was found for a variety of subgroups of individuals that were formed on the basis of sociodemographic and firm-specific characteristics. In contrast to the evidence in the 1990’s, the positive wage effect is now significantly lower for movers from eastern to western Germany compared to movers within eastern Germany.

Keywords: Inter-regional mobility; wage differentials; statistical matching (search for similar items in EconPapers)
Date: 2014
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DOI: 10.1515/jbnst-2014-0501

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