The East German Wage Structure after Transition

We extend the literature on transition economies' wage structures by investigating the returns to tenure and experience. This study applies recent panel data and estimation approaches that control for hitherto neglected biases. We compare the life cycle structure of East and West German wages for fulltime employed men in the private sector. The patterns in the returns to seniority are similar for the two regional labor markets. The returns to experience lag behind in the East German labor market, even almost 20 years after unification with significant differences particularly for high skill workers. The results are robust when only individuals are considered who started their labor market career in the market economy. We expect that the different returns are related to the heterogeneity of work experience gathered in East versus West Germany.wage structure, life cycle earnings, returns to tenure, returns to experience

Cohort effects in the educational attainment of second generation immigrants in Germany: An analysis of census data

Abstract.: Even though second generation immigrants make up ever increasing population shares in industrialized countries we know little about their social integration and wellbeing. This study focuses on the educational attainment of German born children of immigrants. Their schooling success still lags behind that of natives. This paper investigates school attendance and completed degrees of second generation immigrants and finds that even after controlling for characteristics the educational gap remains large and significant. The available evidence suggests that this group as a whole does not assimilate to native educational standards and instead increasingly falls behin

Female labor supply and parental leave benefits – the causal effect of paying higher transfers for a shorter period of time

We study the labor supply effects of a major change in child-subsidy policy in Germany in 2007 designed to both increase fertility and shorten birth-related employment interruptions. The reform involved a move from a means-tested maternity leave benefit system that paid a maximum of 300 Euro for up to two years to an income dependent benefit system that replaced two third of the pre-birth income for at most one year. As the reform took place very recently, we estimate the labor supply effect by using data drawn from the German Socio-Economic Panel on the intention of women to return to the labor market; notably whether women are likely to return and whether they intend to return quickly. Our results show that the reform yields most of the intended effects: The fraction of mothers who responded that they were going to return to the labor market within a year since the interview increased by 14 percentage points.Female labor supply; fertility; child subsidy; parents money

New Evidence on Financial Incentives and the Timing of Retirement

We investigate the responsiveness of individual retirement decisions to changes in financial incentives. The causal effect is identified based on the natural experiment generated by an institutional reform. The results of a binary retirement model are robust to alternative model specifications, to a competing risks framework with endogenous panel attrition, and to alternative representations of unobserved individual-specific heterogeneity. We find strong behavioral effects of changes in financial retirement incentives. A permanent reduction of retirement benefits by 3.4 percent induces a decline in the age-specific annual retirement probability by over 50 percent. The response to the reforms intensifies over time suggesting that retirement behavior may be affected by social norms. The response to changes in financial retirement benefits varies with educational background: those with low education respond most strongly to an increase in the price of leisure.retirement insurance, incentives, social security, labor force exit, natural experiment, Switzerland

Intergenerational Transmission of Educational Attainment in Germany: The Last Five Decades

Over the last decades the German education system underwent numerous reforms in order to improve "equality of opportunity", i.e. to guarantee all pupils equal access to higher education. At the same time internationally comparative evidence yields that Germany features particularly low intergenerational mobility with respect to educational attainment. This study investigates the development in intergenerational education mobility in Germany for the birth cohorts 1929 through 1978 and tests whether the impact of parental background on child educational outcomes changed over time. In spite of massive public policy interventions and education reforms our results yield no significant reduction in the role of parental background for child outcomes over the last decades.education transmission, intergenerational mobility, schooling, human capital transmission, Lohnungleichheit, Einkommensgleichung, Quantilsregression

Female Labor Supply and Parental Leave Benefits: The Causal Effect of Paying Higher Transfers for a Shorter Period of Time

We study the labor supply effects of a change in child-subsidy policy designed to both increase fertility and shorten birth-related employment interruptions. The reform yields most of the intended effects.female labor supply, fertility, child subsidy, parents money

The East German Wage Structure after Transition

We extend the literature on transition economies' wage structures by investigating the returns to tenure and experience. This study applies recent panel data and estimation approaches that control for hitherto neglected biases. We compare the life cycle structure in East and West German wages for fulltime employed men in the private sector. The patterns in the returns to seniority are similar for the two regional labor markets. The returns to experience lag behind in the East German labor market, even almost 20 years after unification. The results are robust when only individuals are considered who started their labor market career in the market economy and they hold across skill groups.wage structure, life cycle earnings, returns to tenure, returns to experience

The Introduction of a Short-Term Earnings-Related Parental Leave Benefit System and Differential Employment Effects

German family policy underwent a reform in 2007, when the new instrument of "Elterngeld" replaced the previous "Erziehungsgeld". The transfer programs differ in various dimensions. We study the effects on the labor supply of young mothers, by comparing behavior before and after the reform. We separately consider women of high and low incomes, which were treated differently under the old "Erziehungsgeld"-regime, and differentiate the periods before and after the expiration of transfer receipt. Our results mainly confirm expectations based on a labor supply framework.Female labor supply, fertility, child subsidy, parents money

The Employment of Mothers: Recent Developments and their Determinants in East and West Germany

We apply German Mikrozensus data for the period 1996 to 2004 to investigate the employment status of mothers. Specifically, we ask whether there are behavioral differences between mothers in East and West Germany, whether these differences disappear over time, and whether there are differences in the developments for high vs. low and medium skilled females. We find substantial differences in the employment behavior of East and West German mothers. German family policy sets incentives particularly for low income mothers not to return to the labor market after birth. East German mothers' employment outcomes matches that expected based on these policy incentives: over time East German mothers with low earnings potentials appear to adopt West German low employment patterns.mothers, parental leave, East Germany, employment, child care

Wage Mobility in East and West Germany

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