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The Separation and Reunification of Germany: Rethinking a Natural Experiment Interpretation of the Enduring Effects of Communism

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  • Becker, Sascha O.

    (Monash University)

  • Mergele, Lukas

    (Ifo Institute for Economic Research)

  • Woessmann, Ludger

    (University of Munich)

Abstract

German separation in 1949 into a communist East and a capitalist West and their reunification in 1990 are commonly described as a natural experiment to study the enduring effects of communism. We show in three steps that the populations in East and West Germany were far from being randomly selected treatment and control groups. First, the later border is already visible in many socio-economic characteristics in pre-World War II data. Second, World War II and the subsequent occupying forces affected East and West differently. Third, a selective fifth of the population fled from East to West Germany before the building of the Wall in 1961. In light of our findings, we propose a more cautious interpretation of the extensive literature on the enduring effects of communist systems on economic outcomes, political preferences, cultural traits, and gender roles.

Suggested Citation

  • Becker, Sascha O. & Mergele, Lukas & Woessmann, Ludger, 2020. "The Separation and Reunification of Germany: Rethinking a Natural Experiment Interpretation of the Enduring Effects of Communism," IZA Discussion Papers 13032, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp13032
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    More about this item

    Keywords

    political systems; communism; preferences; culture; Germany;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • P26 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Property Rights
    • P36 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty
    • N44 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Europe: 1913-

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