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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
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    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].

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