Rising Wage Dispersion, After All! The German Wage Structure at the Turn of the Century

52 Pages Posted: 16 May 2006 Last revised: 26 Aug 2008

See all articles by Karsten Kohn

Karsten Kohn

Kreditanstalt für Wiederaufbau (KfW), KfW Development Bank; IZA Institute of Labor Economics

Multiple version iconThere are 2 versions of this paper

Date Written: 2006

Abstract

Using register data from the IAB employment sample, this paper studies the wage structure in the German labor market throughout the years 1992-2001. Wage dispersion has generally been rising. The increase was more pronounced in East Germany and occurred predominantly in the lower part of the wage distribution for women and in the upper part for men. Censored quantile wage regressions reveal diverse age and skill patterns. Applying Machado/Mata (2005)-type decompositions I conclude that differences in the composition of the work force only had a small impact on the observed wage differentials between East and West Germany, but changes in the characteristics captured better parts of the observed wage changes over time.

Keywords: Wage inequality, censored quantile regression, Machado/Mata decomposition, IABS, East Germany, West Germany

JEL Classification: J31, C24

Suggested Citation

Kohn, Karsten, Rising Wage Dispersion, After All! The German Wage Structure at the Turn of the Century (2006). ZEW - Centre for European Economic Research Discussion Paper No. 06-031. Available at SSRN: https://ssrn.com/abstract=901404 or http://dx.doi.org/10.2139/ssrn.901404

Karsten Kohn (Contact Author)

Kreditanstalt für Wiederaufbau (KfW), KfW Development Bank ( email )

Palmengartenstr. 5-9
Frankfurt, 60325
Germany

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

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