Wage Effects of the Move toward Free Markets in East Germany

Edward J. Bird, Johannes Schwarze and Gert Wagner

ILR Review, 1994, vol. 47, issue 3, 390-400

Abstract: This analysis of data from the German Socio-Economic Panel (SOEP) for the years 1989–91 illuminates important changes in the structure of wages that were occurring in the former East Germany during its transition toward a capitalist economy—and changes that are probably occurring in other countries in Eastern Europe as well. Under the new capitalist wage regime, workers realized significant returns to schooling gained under socialism, but no significant returns to work experience. Because work experience is the largest element in the human capital of older workers, their wages fell under the new system; and the results suggest that their wages will continue to fall relative to those of younger workers. Generous transfer payments from western Germany may prevent an absolute decline in living standards of these workers. Older workers in other eastern countries, however, will have no such social assistance, and their living standards will probably fall.

Date: 1994
References: Add references at CitEc
Citations: View citations in EconPapers (71)

Downloads: (external link)
http://ilr.sagepub.com/content/47/3/390.abstract (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:ilrrev:v:47:y:1994:i:3:p:390-400

Access Statistics for this article

More articles in ILR Review from Cornell University, ILR School
Bibliographic data for series maintained by SAGE Publications ().