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Wage Mobility in East and West Germany


Regina T. Riphahn


University of Erlangen-Nuremberg - Department of Economics; Institute for the Study of Labor (IZA); CESifo (Center for Economic Studies and Ifo Institute)

Daniel Schnitzlein


German Institute for Economic Research (DIW Berlin); University of Hamburg


IZA Discussion Paper No. 6246

Abstract:     
This article studies the long run patterns and explanations of wage mobility as a characteristic of regional labor markets. Using German administrative data we describe wage mobility since 1975 in West and since 1992 in East Germany. Wage mobility declined substantially in East Germany in the 1990s and moderately in East and West Germany since the late 1990s. Therefore, wage mobility does not balance recent increases in cross-sectional wage inequality. We apply RIF (recentered influence function) regression based decompositions to measure the role of potential explanatory factors behind these mobility changes. Increasing job stability is an important factor associated with the East German mobility decline.

Number of Pages in PDF File: 67

Keywords: wage mobility, earnings mobility, income mobility, Germany, East Germany, inequality, transition matrix, Shorrocks index, administrative data

JEL Classification: J30, J31, J60, D63

working papers series





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Date posted: January 8, 2012  

Suggested Citation

Riphahn, Regina T. and Schnitzlein, Daniel, Wage Mobility in East and West Germany. IZA Discussion Paper No. 6246. Available at SSRN: http://ssrn.com/abstract=1981202

Contact Information

Regina T. Riphahn (Contact Author)
University of Erlangen-Nuremberg - Department of Economics ( email )
Lange Gasse 20
Nuernberg, D-90403
Germany
Institute for the Study of Labor (IZA)
P.O. Box 7240
Bonn, D-53072
Germany
CESifo (Center for Economic Studies and Ifo Institute)
Poschinger Str. 5
Munich, DE-81679
Germany
Daniel Schnitzlein
German Institute for Economic Research (DIW Berlin) ( email )
Mohrenstraße 58
Berlin, 10117
Germany
University of Hamburg ( email )
Allende-Platz 1
Hamburg, 20146
Germany
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