IDEAS home Printed from https://ideas.repec.org/a/jns/jbstat/v234y2014i5p546-571.html
   My bibliography  Save this article

Does Switching to a Western German Employer Still Pay Off?: An Analysis for Eastern Germany

Author

Listed:
  • Alm Bastian

    (TU Dortmund University, August-Schmidt-Str. 6, 44227 Dortmund, Germany and Federal Ministry of Economics and Technology, Scharnhorststraße 34–37, 10115 Berlin, Germany)

  • Engel Dirk

    (University of Applied Sciences Stralsund, Zur Schwedenschanze 15, 18435 Stralsund, Germany and Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI), Hohenzollernstr. 1–3, 45128 Essen, Germany)

  • Weyh Antje

    (Institute for Employment Research (IAB), IAB Regional Saxony, Paracelsusstraße 12, 09114 Chemnitz, Germany)

Abstract

This paper deals with the medium-term effects of job mobility on the average wage growth of job-movers in eastern Germany. The analysis is based on all employees subject to social insurance contributions working in eastern Germany in 2004. Using a statistical matching procedure combined with a difference-in-differences estimator, we observe that job-movers achieve an average annual wage increase of 2.68% between 2004 and 2009, which is significantly higher than the annual wage growth of selected non-movers (1.34 %). The finding is very robust against changes in the matching procedure. The positive wage differential due to changing jobs was found for a variety of subgroups of individuals that were formed on the basis of sociodemographic and firm-specific characteristics. In contrast to the evidence in the 1990’s, the positive wage effect is now significantly lower for movers from eastern to western Germany compared to movers within eastern Germany.

Suggested Citation

  • Alm Bastian & Engel Dirk & Weyh Antje, 2014. "Does Switching to a Western German Employer Still Pay Off?: An Analysis for Eastern Germany," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 234(5), pages 546-571, October.
    • Handle: RePEc:jns:jbstat:v:234:y:2014:i:5:p:546-571
    DOI: 10.1515/jbnst-2014-0501
    as

    Download full text from publisher

    File URL: https://doi.org/10.1515/jbnst-2014-0501
    Download Restriction: no
    File URL: https://libkey.io/10.1515/jbnst-2014-0501?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Ann P. Bartel & George J. Borjas, 1981. "Wage Growth and Job Turnover: An Empirical Analysis," NBER Chapters, in: Studies in Labor Markets, pages 65-90, National Bureau of Economic Research, Inc.
    2. Jan Goebel & Roland Habich & Peter Krause, 2009. "Zur Angleichung von Einkommen und Lebensqualität im vereinigten Deutschland," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 78(2), pages 122-145.
    3. John Kennan & James R. Walker, 2011. "The Effect of Expected Income on Individual Migration Decisions," Econometrica, Econometric Society, vol. 79(1), pages 211-251, January.
    4. Rosen, Sherwin, 2007. "Studies in Labor Markets," National Bureau of Economic Research Books, University of Chicago Press, number 9780226726304, April.
    5. James J. Heckman & Hidehiko Ichimura & Petra E. Todd, 1997. "Matching As An Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 64(4), pages 605-654.
    6. Herbert Brücker & Parvati Trübswetter, 2007. "Do the best go west? An analysis of the self-selection of employed East-West migrants in Germany," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 34(4), pages 371-395, September.
    7. Jacob Mincer & Boyan Jovanovic, 1981. "Labor Mobility and Wages," NBER Chapters, in: Studies in Labor Markets, pages 21-64, National Bureau of Economic Research, Inc.
    8. Gary S. Becker, 1962. "Investment in Human Capital: A Theoretical Analysis," NBER Chapters, in: Investment in Human Beings, pages 9-49, National Bureau of Economic Research, Inc.
    9. Jennifer Hunt, 2001. "Post-Unification Wage Growth in East Germany," The Review of Economics and Statistics, MIT Press, vol. 83(1), pages 190-195, February.
    10. Matthias Almus, 2004. "The Shadow of Death -- An Emperical Analysis of the Pre-Exit Performance of New German Firms," Small Business Economics, Springer, vol. 23(3), pages 189-201, October.
    11. Riphahn, Regina T. & Schnitzlein, Daniel D., 2016. "Wage mobility in East and West Germany," Labour Economics, Elsevier, vol. 39(C), pages 11-34.
    12. Daniel Fackler & Claus Schnabel & Joachim Wagner, 2014. "Lingering illness or sudden death? Pre-exit employment developments in German establishments," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 23(4), pages 1121-1140.
    13. Christian Göbel & Thomas Zwick, 2012. "Age and Productivity: Sector Differences," De Economist, Springer, vol. 160(1), pages 35-57, March.
    14. Almus, Matthias & Egeln, Jürgen & Lechner, Michael & Pfeiffer, Friedhelm & Spengler, Hannes, 1998. "Die gemeinnützige Arbeitnehmerüberlassung in Rheinland-Pfalz: Eine ökonometrische Analyse des Wiedereingliederungserfolgs," ZEW Discussion Papers 98-36, ZEW - Leibniz Centre for European Economic Research.
    15. Audrey Light & Kathleen McGarry, 1998. "Job Change Patterns And The Wages Of Young Men," The Review of Economics and Statistics, MIT Press, vol. 80(2), pages 276-286, May.
    16. Anzelika Zaiceva, 2006. "Self-Selection and the Returns to Geographic Mobility: What Can Be Learned from the German Reunification "Experiment"," Discussion Papers of DIW Berlin 580, DIW Berlin, German Institute for Economic Research.
    17. Paul W. Holland & Donald B. Rubin, 1988. "Causal Inference in Retrospective Studies," Evaluation Review, , vol. 12(3), pages 203-231, June.
    18. Florian Lehmer & Johannes Ludsteck, 2011. "The returns to job mobility and inter‐regional migration: Evidence from Germany," Papers in Regional Science, Wiley Blackwell, vol. 90(3), pages 549-571, August.
    19. Sven Jung & Claus Schnabel, 2011. "Paying More than Necessary? The Wage Cushion in Germany," LABOUR, CEIS, vol. 25(2), pages 182-197, June.
    20. Carlos Carreira & Paulino Teixeira, 2011. "The shadow of death: analysing the pre-exit productivity of Portuguese manufacturing firms," Small Business Economics, Springer, vol. 36(3), pages 337-351, April.
    21. Boheim, Rene & Taylor, Mark P., 2007. "From the dark end of the street to the bright side of the road? The wage returns to migration in Britain," Labour Economics, Elsevier, vol. 14(1), pages 99-117, January.
    22. Glaeser, Edward L & Mare, David C, 2001. "Cities and Skills," Journal of Labor Economics, University of Chicago Press, vol. 19(2), pages 316-342, April.
    23. Florian Lehmer & Joachim MOLler, 2008. "Group-specific Effects of Inter-regional Mobility on Earnings - A Microdata Analysis for Germany," Regional Studies, Taylor & Francis Journals, vol. 42(5), pages 657-674.
    24. Lechner, Michael, 2008. "A note on endogenous control variables in causal studies," Statistics & Probability Letters, Elsevier, vol. 78(2), pages 190-195, February.
    25. A. D. Roy, 1951. "Some Thoughts On The Distribution Of Earnings," Oxford Economic Papers, Oxford University Press, vol. 3(2), pages 135-146.
    26. Hethey, Tanja & Schmieder, Johannes F., 2010. "Using worker flows in the analysis of establishment turnover : evidence from German administrative data," FDZ Methodenreport 201006_en, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    27. Jovanovic, Boyan, 1979. "Firm-specific Capital and Turnover," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1246-1260, December.
    28. Engel Dirk, 2003. "Höheres Beschäftigungswachstum durch Venture Capital? / Does Venture Capital Affect New Firms' Growth?," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 223(1), pages 1-22, February.
    29. Harris, John R & Todaro, Michael P, 1970. "Migration, Unemployment & Development: A Two-Sector Analysis," American Economic Review, American Economic Association, vol. 60(1), pages 126-142, March.
    30. Schneider, Lutz, 2007. "Zu alt für einen Wechsel? Zum Zusammenhang von Alter, Lohndifferentialen und betrieblicher Mobilität," IWH Discussion Papers 1/2007, Halle Institute for Economic Research (IWH).
    31. Munasinghe, Lalith & Sigman, Karl, 2004. "A hobo syndrome? Mobility, wages, and job turnover," Labour Economics, Elsevier, vol. 11(2), pages 191-218, April.
    32. Franz-Josef Kemper, 2004. "Internal Migration in Eastern and Western Germany: Convergence or Divergence of Spatial Trends after Unification?," Regional Studies, Taylor & Francis Journals, vol. 38(6), pages 659-678.
    33. repec:iab:iabfme:201006(en is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Schnabel Claus, 2016. "United, Yet Apart? A Note on Persistent Labour Market Differences between Western and Eastern Germany," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 236(2), pages 157-179, March.
    2. Regina T. Riphahn & Irakli Sauer, 2024. "Earnings Assimilation of Post-Reunification East German Migrants in West Germany," CESifo Working Paper Series 11233, CESifo.
    3. Emmler, Julian & Fitzenberger, Bernd, 2020. "The role of unemployment and job change when estimating the returns to migration," IAB-Discussion Paper 202037, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Maria A. Davia, 2010. "Job Mobility And Wage Growth At The Beginning Of The Professional Career In Spain," Revista de Economia Aplicada, Universidad de Zaragoza, Departamento de Estructura Economica y Economia Publica, vol. 18(1), pages 5-34, Spring.
    2. Michaela Fuchs & Antje Weyh, 2014. "The pre-exit performance of German plants - How long is the 'shadow of death'?," ERSA conference papers ersa14p1644, European Regional Science Association.
    3. Maite Blázquez, 2009. "Earnings mobility in Spain: the role of job mobility and contractual arrangements," Spanish Economic Review, Springer;Spanish Economic Association, vol. 11(3), pages 179-205, September.
    4. Burks, Stephen V. & Monaco, Kristen, 2018. "Is the U.S. Labor Market for Truck Drivers Broken? An Empirical Analysis Using Nationally Representative Data," IZA Discussion Papers 11813, Institute of Labor Economics (IZA).
    5. Michael Waldman, 1988. "Interpreting Evidence on Returns to Tenure: The Significance of Quasi-Specific Human Capital," UCLA Economics Working Papers 479, UCLA Department of Economics.
    6. FOUARGE Didier & MUFFELS Ruud & PAVLOPOULOS Dimitris & VERMUNT Jeroen K., 2007. "Who benefits from a job change: The dwarfs or the giants?," IRISS Working Paper Series 2007-16, IRISS at CEPS/INSTEAD.
    7. Munasinghe, Lalith & Sigman, Karl, 2004. "A hobo syndrome? Mobility, wages, and job turnover," Labour Economics, Elsevier, vol. 11(2), pages 191-218, April.
    8. repec:eee:labchp:v:1:y:1986:i:c:p:525-602 is not listed on IDEAS
    9. Lehmer, Florian & Ludsteck, Johannes, 2008. "The returns to job mobility and inter-regional migration," IAB-Discussion Paper 200806, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    10. Orsa Kekezi & Ron Boschma, 2021. "Returns to migration after job loss—The importance of job match," Environment and Planning A, , vol. 53(6), pages 1565-1587, September.
    11. Cassidy, Hugh & DeVaro, Jed & Kauhanen, Antti, 2016. "Promotion signaling, gender, and turnover: New theory and evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 126(PA), pages 140-166.
    12. Florian Lehmer & Joachim MOLler, 2008. "Group-specific Effects of Inter-regional Mobility on Earnings - A Microdata Analysis for Germany," Regional Studies, Taylor & Francis Journals, vol. 42(5), pages 657-674.
    13. Zuckerman, Ezra W. & Kim, Tai-Young & Ukanwa, Kalinda & James, von Rittmann, 2003. "Robust Identities or Non-Entities? Typecasting in the Feature Film Labor Market," Working papers 4291-02, Massachusetts Institute of Technology (MIT), Sloan School of Management.
    14. repec:eee:labchp:v:3:y:1999:i:pb:p:2373-2437 is not listed on IDEAS
    15. Parent, Daniel, 2002. "Matching, human capital, and the covariance structure of earnings," Labour Economics, Elsevier, vol. 9(3), pages 375-404, July.
    16. repec:eee:labchp:v:2:y:1986:i:c:p:789-848 is not listed on IDEAS
    17. Borghans, Lex & Golsteyn, Bart H.H., 2010. "Job Mobility in Europe, Japan and the U.S," IZA Discussion Papers 5386, Institute of Labor Economics (IZA).
    18. Adele Bergin, 2013. "Job Changes and Wage Changes: Estimation with Measurement Error in a Binary Variable," Economics Department Working Paper Series n240-13.pdf, Department of Economics, National University of Ireland - Maynooth.
    19. Ham, John C. & Li, Xianghong & Reagan, Patricia B., 2011. "Matching and semi-parametric IV estimation, a distance-based measure of migration, and the wages of young men," Journal of Econometrics, Elsevier, vol. 161(2), pages 208-227, April.
    20. Zaiceva, Anzelika, 2010. "East-West migration and gender: Is there a differential effect for migrant women?," Labour Economics, Elsevier, vol. 17(2), pages 443-454, April.
    21. Joseph G. Altonji & Robert A. Shakotko, 1987. "Do Wages Rise with Job Seniority?," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 54(3), pages 437-459.
    22. Eric Parrado & Asena Caner & Edward N. Wolff, 2005. "Occupational and Industrial Mobility in the United States 1969–93," Economics Working Paper Archive wp_416, Levy Economics Institute.
    23. Argaw, Bethlehem A. & Maier, Michael F. & Skriabikova, Olga J., 2017. "Risk attitudes, job mobility and subsequent wage growth during the early career," ZEW Discussion Papers 17-023, ZEW - Leibniz Centre for European Economic Research.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jns:jbstat:v:234:y:2014:i:5:p:546-571. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyter.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.