Assimilation and Cohort Effects for German Immigrants

Demographic change and the rising demand for highly qualified labor in Germany attracts notice to the analysis of immigration. In addition, the pattern of immigration changed markedly during the past decades. Therefore we use the latest data of the German Socioeconomic Panel up to the year 2006 in order to investigate the economic performance of immigrants. We perform regressions of three pooled cross sections (1986, 1996, 2006) to estimate assimilation and quality of immigrants as reflected by their earnings. Further we take the heterogeneity of immigrants into account by separating them by country of origin. The rising wage inequality in Germany since the mid nineties will also be considered. We find a negative wage gap and a yearly assimilation rate of 2.3 percent. Due to a changing immigration pattern the cohort quality is declining.Assimilation, immigrants, cohort quality, Germany

20 Years of German Unification: Evidence on Income Convergence and Heterogeneity

We analyse the convergence and heterogeneity of living standards between East and West Germany since unification. Based on data from the German Socio-Economic Panel (GSOEP), we compare total individual income of permanent adult residents, including retirees and the unemployed, of East and West Germany over the fifteen years for which data are available. Using a fixed effects vector decomposition method, we estimate the gross total income difference between East and West Germans taking unobserved heterogeneity into account. Our analysis demonstrates that the negative income gap has decreased from 33 per cent in 1992 to 22 per cent in 2002, rising again to 26 per cent in 2007. Hence some convergence took place in nominal terms since unification. Constructing income gaps by decennial cohorts, we discover that the most recent cohorts have the highest negative income gap. This probably reflects out-migration from East Germany by the young and highly skilled. On the basis of quantile regressions we find a positive income gap at the beginning of the 1990s for the lower income deciles (that is higher incomes in East Germany). This was due to retirees in the East with relative long employment histories receiving transfer payments by western standards. The income gap is insignificant when accounting for heterogeneity at the area level by including area level variables to our regression.unification, living standards, income inequality, distribution, GSOEP, Germany

What Determines the Duration of Stay of Immigrants in Germany?: Evidence from a Longitudinal Duration Analysis

We analyze the return-migration of German immigrants using the latest data of the German Socio- Economic Panel from 1984 to 2006. We conduct a Cox proportional hazard model with years of residence in Germany as waiting time. The analysis reveals that return migration is heavily influenced by country of origin. Individuals from countries with free labor movement agreements with Germany show a considerably higher likelihood of leaving the country relative to the others. The main finding is, with respect to the self-selection process we discovered that highly skilled are more likely to return than the less skilled. In addition, the results give plenty of information regarding the design of German immigration policy.Remigration, Cox proportional hazard model, Germany

20 Years of German Unification: Evidence on Income Convergence and Heterogeneity

We analyse the convergence and heterogeneity of living standards between East and West Germany since unification. Based on data from the German Socio-Economic Panel (GSOEP), we compare total individual income of permanent adult residents, including retirees and the unemployed, of East and West Germany over the fifteen years for which data are available. Using a fixed effects vector decomposition method, we estimate the gross total income difference between East and West Germans taking unobserved heterogeneity into account. Our analysis demonstrates that the negative income gap has decreased from 33 per cent in 1992 to 22 per cent in 2002, rising again to 26 per cent in 2007. Hence some convergence took place in nominal terms since unification. Constructing income gaps by decennial cohorts, we discover that the most recent cohorts have the highest negative income gap. This probably reflects out-migration from East Germany by the young and highly skilled. On the basis of quantile regressions we find a positive income gap at the beginning of the 1990s for the lower income deciles (that is higher incomes in East Germany). This was due to retirees in the East with relative long employment histories receiving transfer payments by western standards. The income gap is insignificant when accounting for heterogeneity at the area level by including area level variables to our regression.Unification, living standards, income inequality, distribution, GSOEP, Germany

Assimilation and cohort effects for German immigrants

Demographic change and the rising demand for highly qualified labor in Germany attracts notice to the analysis of immigration. In addition, the pattern of immigration changed markedly during the past decades. Therefore we use the latest data of the German Socioeconomic Panel up to the year 2006 in order to investigate the economic performance of immigrants. We perform regressions of three pooled cross sections (1986, 1996, 2006) to estimate assimilation and quality of immigrants as reflected by their earnings. Further we take the heterogeneity of immigrants into account by separating them by country of origin. The rising wage inequality in Germany since the mid nineties will also be considered. We find a negative wage gap and a yearly assimilation rate of 2.3 percent. Due to a changing immigration pattern the cohort quality is declining. --

20 Years of German Unification: Evidence on Income Convergence and Heterogeneity

We analyse the convergence and heterogeneity of living standards between East and West Germany since unification. Based on data from the German Socio-Economic Panel (GSOEP), we compare total individual income of permanent adult residents, including retirees and the unemployed, of East and West Germany over the fifteen years for which data are available. Using a fixed effects vector decomposition method, we estimate the gross total income difference between East and West Germans taking unobserved heterogeneity into account. Our analysis demonstrates that the negative income gap has decreased from 33 per cent in 1992 to 22 per cent in 2002, rising again to 26 per cent in 2007. Hence some convergence took place in nominal terms since unification. Constructing income gaps by decennial cohorts, we discover that the most recent cohorts have the highest negative income gap. This probably reflects out-migration from East Germany by the young and highly skilled. On the basis of quantile regressions we find a positive income gap at the beginning of the 1990s for the lower income deciles (that is higher incomes in East Germany). This was due to retirees in the East with relative long employment histories receiving transfer payments by western standards. The income gap is insignificant when accounting for heterogeneity at the area level by including area level variables to our regression.Unification, living standards, income inequality, distribution, GSOEP, Germany

Outside board memberships of CEOs: Expertise or entrenchment?

We investigate whether outside board memberships of CEOs signal expertise or entrenchment. The analysis is based on panel data of the largest German companies covering the period from 1996 to 2008. Supporting the entrenchment hypothesis, our analysis reveals that firms having a CEO with one or more outside mandates suffer from significantly weaker firm performance compared with firms having a CEO without any outside board mandates. Moreover, disciplinary CEO turnovers become less likely and turnover-performance sensitivity declines with rising board memberships of the top manager. We conclude that outside mandates enhance managerial power at the expense of the home firm's shareholders. --Corporate Governance,Entrenchment,Outside Board Memberships,CEO turnover

Theorie optimaler Währungsräume vor dem Hintergrund der EU-Erweiterung

The first step towards integration of the ten new member countries of the European Union was their accession. The second step will be their integration into the European Monetary Union. Here, they have to give up their own monetary policy in favour of complying with the monetary policy of the European Central Bank. The exchange rate as a shock absorber is not available anymore. The expected costs of accession to a monetary union are typically derived by optimum currency area theory. According to optimum currency area theory one can divide the new member countries into two groups. For the first group - Slovenia, Czech Republic, Hungary, Cyprus and Malta - the accession costs are lower than for the second group - Poland, Latvia, Lithuania, Estonia and Slovakia. So the accession of the second group should be postponed until a stronger economic adjustment toward the European Monetary Union is reached. --

Geldpolitische Strategien der neuen EU-Mitgliedsländer bis zur Euroeinführung

As soon as the ten new member countries have fulfilled the convergence criteria of Maastricht they can be accepted for accession to the European Monetary Union. By now, these countries pursue quite different monetary policies strategies in order to reach a high degree of monetary convergence, including different exchange rate systems. Since the new Eastern European countries are in a transformation process with partly difficult disinflation processes it is especially important to adopt the best strategy available. Therefore, information on the relative success of the different monetary policy strategies seems important, for if certain strategies can be identified as more successful than others, it makes sense for the other countries to adopt them. In that way the overall monetary convergence process in the new EU member countries could be improved. In what follows, the different monetary policies are theoretically described. This is followed by a description of the monetary policy strategies as they have been applied during the 1990s. In order to determine the relative success of these strategies the position of each country relative to the average of the ten new member countries is determined on the basis of five indicators: GDP growth, rate of inflation, current account balance, real effective exchange rate, and budget deficit. It turns out that the three Baltic States as well as Poland and the Czech Republic have so far been more successful than Slovenia, Slovakia and Hungary. Furthermore, a regime of either fixed or flexible exchange rate systems seems to be superior to any point on a continuum between this two "border points". --

Lohnungleichheit innerhalb und zwischen Bevölkerungsgruppen in Deutschland und den USA

This article is concerned with the development of wage inequality in the USA and Germany. Base data for the USA is the Panel Study of Income Dynamics, for Germany the Socio-Economic Panel. By reason of divergent economic development in East and West-Germany, both parts are examined separately. After a descriptive examination of base data the estimation of an advanced Mincerequation is performed. By applying quantile regression the development of wage disparity between and within population groups can be ascertained. In diesem Beitrag wird die Entwicklung der Lohnungleichheit in den USA und Deutschland betrachtet. Für Deutschland wird als Datengrundlage die harmonisierte Version des Sozioökonomischen Panels und für die USA die harmonisierte Version der Panel Study of Income Dynamics verwendet. Aufgrund der divergenten ökonomischen Situation in West- und Ostdeutschland werden diese getrennt voneinander betrachtet. Nach einer deskriptiven Betrachtung der verwendeten Datensätze wird die Schätzung einer erweiterten Mincergleichung durchgeführt. Durch die Anwendung der Quantilsregression lässt sich die Entwicklung der Lohnungleichheit zwischen und innerhalb von Bevölkerungsgruppen ermitteln.wage inequality, income equation, quantile regression