United, Yet Apart? A Note on Persistent Labour Market Differences between Western and Eastern Germany

TitleUnited, Yet Apart? A Note on Persistent Labour Market Differences between Western and Eastern Germany
Publication TypeReport
Year of Publication2015
AuthorsSchnabel, Claus
Date Published2015///
InstitutionIZA Discussion Paper No. 8919
CityBonn, Germany
KeywordsGerman unification, Germany, labour market disparities
Abstract

Comparing aggregate statistics and surveying selected empirical studies, this paper shows that the characteristics and results of labor markets in eastern and western Germany have become quite similar in some respects but still differ markedly in others even 25 years after unification. Whereas no substantial differences can be detected in firms' labor demand decisions and in employees' representation via works councils or trade unions, both parts of the country are somewhat apart concerning labour supply behaviour, labour productivity, wages, and bargaining coverage, and they still exhibit substantially different rates of unemployment. These differences may reflect observable and unobservable characteristics of economic actors as well as differences in behaviour, norms, and individuals' attitudes.

URLhttp://papers.ssrn.com/sol3/papers.cfm?abstract_id=2586422