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The persistent pay gap between Easterners and Westerners in Germany: A quarter‐century after reunification

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  • Heather Dickey
  • Alessa M. Widmaier

Abstract

A quarter of a century after Germany's reunification, Eastern Germans still earn substantially less than Western Germans. This paper revisits the German wage differential and isolates the effect of differing returns to human capital endowments, the possibility of a location effect, and human capital depreciation on the regional wage gap. While the endowment effect, location effect, and human capital depreciation jointly account for the wage differential between Easterners and Westerners living in the West, the same does not hold true for individuals settled in the East, where part of the wage gap remains unexplained. Un cuarto de siglo después de la reunificación de Alemania, los alemanes del Este siguen ganando bastante menos que los del Oeste. Este artículo revisa el diferencial salarial alemán y aísla el efecto de los diferentes rendimientos de las dotaciones de capital humano, la posibilidad de un efecto de localización y la depreciación del capital humano en la brecha salarial regional. Mientras que el efecto de la dotación, el efecto de la localización y la depreciación del capital humano explican conjuntamente el diferencial salarial entre los orientales y los occidentales que viven en el Oeste, no ocurre lo mismo con los individuos asentados en el Este, donde parte de la brecha salarial sigue sin poderse explicar. ドイツ再統一から四半世紀が経った今でも、東独出身者の所得は西独出身者よりかなり少ない。本稿では、ドイツの賃金格差を再検討し、地域の賃金格差に対する、人的資本の賦存への異なるリターン、立地効果の可能性、人的資本の減価償却の影響を特定する。ドイツ西部に住む東独出身者と西独出身者の賃金格差には、授かり効果、立地効果、人的資本の減価がともに寄与しているが、これは賃金格差の理由が部分的に依然不明な東部に定住した人には当てはまらない。

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  • Heather Dickey & Alessa M. Widmaier, 2021. "The persistent pay gap between Easterners and Westerners in Germany: A quarter‐century after reunification," Papers in Regional Science, Wiley Blackwell, vol. 100(3), pages 605-631, June.
  • Handle: RePEc:bla:presci:v:100:y:2021:i:3:p:605-631
    DOI: 10.1111/pirs.12594
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    Cited by:

    1. Jannik André Nauerth & Johan Pflanz, 2023. "Lohnlücke Ost-West – Ewige Disparität oder schiefer Vergleich?," ifo Dresden berichtet, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 30(05), pages 08-13, October.
    2. Cardullo, Gabriele & Sechi, Agnese, 2023. "Local Labor Markets with Non-homothetic Preferences," IZA Discussion Papers 16533, Institute of Labor Economics (IZA).

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