Template-Type: ReDIF-Paper 1.0

Author-Name: Robert Orlowski
Author-X-Name-First: Robert
Author-X-Name-Last: Orlowski

Author-Name: Regina T. Riphahn
Author-X-Name-First: Regina T.
Author-X-Name-Last: Riphahn

Title: The East German Wage Structure after Transition

Abstract: We extend the literature on transition economies' wage structures by investigating the returns
to tenure and experience. This study applies recent panel data and estimation approaches that
control for hitherto neglected biases. We compare the life cycle structure of East and West
German wages for fulltime employed men in the private sector. The patterns in the returns to
seniority are similar for the two regional labor markets. The returns to experience lag behind
in the East German labor market, even almost 20 years after unification with significant
differences particularly for high skill workers. The results are robust when only individuals
are considered who started their labor market career in the market economy. We expect that
the different returns are related to the heterogeneity of work experience gathered in East
versus West Germany.
Length:  41 pages
Creation-Date:  2009-05
File-URL: http://www.bgpe.de/texte/DP/073_orlowski.pdf
File-Format: Application/pdf
File-Function: First version, 2009
Number: 073
Classification-JEL: J31, J24
Keywords: wage structure, life cycle earnings, returns to tenure, returns to experience
Handle: RePEc:bav:wpaper:073_orlowski