Einkommensentwicklung im Freistaat Sachsen

Stefan Arent (), Wolfgang Nagl and Joachim Ragnitz

in ifo Dresden Studien from ifo Institute - Leibniz Institute for Economic Research at the University of Munich

Abstract: The main task of the analysis is a comparison of the income development of employees in the private and public sector since reunification. The report compares the growth of the gross wage to the union negotiated wage. Amenities as well as vacation days were considered. Since the price level is an important factor of the wage bargaining process in the private sector, the real wages were also examined.. Finally the risk of being laid off in both the public and private sectors was analyzed. This is important for the correct evaluation of wages in different sectors of an economy. The results show a slow reduction of both the nomnial and the real wage differential in the private sector between eastern and western Germany. The fast convergence of the union negotiated wages in the private sector does not result in a convergence of the average wage levels. We observe a faster convergence of the union negotiated wage in industries with lower tariff commitment. Industries with a high tariff commitment do not adapt the western union negotiated wages perfectly. In contrast to the private sector we observe a good match in the development of nominal and negotiated wages in the public sector in both parts of Germany. Whereas a nearly complete alignment of the real wages between the east and the west has taken place in the public sector the same is not the case in the private sector.

JEL-codes: I21 I28 J15 J24 L26 Z13 (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ifodrs:61

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