Wage Mobility in East and West Germany

67 Pages Posted: 8 Jan 2012  

Regina T. Riphahn

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg - Department of Economics; IZA Institute of Labor Economics; CESifo (Center for Economic Studies and Ifo Institute)

Daniel Schnitzlein

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

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.

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

JEL Classification: J30, J31, J60, D63

Suggested Citation

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

Regina T. Riphahn (Contact Author)

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg - Department of Economics ( email )

Lange Gasse 20
Nuernberg, D-90403
Germany

IZA Institute of Labor Economics

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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