IDEAS home Printed from https://ideas.repec.org/p/wrk/warwec/1255.html
   My bibliography  Save this paper

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

Author

Listed:
  • Becker, Sascha O.

    (Monash University, University of Warwick, CEPR, CESifo, IZA, CAGE, and ROA)

  • Mergele, Lukas

    (ifo Institute at the University of Munich, CESifo)

  • Woessmann, Ludger

    (University of Munich and ifo Institute, CESifo, IZA, CAGE, and ROA)

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. JEL codes: D72 ; H11 ; P26 ; P36 ; N44

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," The Warwick Economics Research Paper Series (TWERPS) 1255, University of Warwick, Department of Economics.
    • Handle: RePEc:wrk:warwec:1255
    as

    Download full text from publisher

    File URL: https://warwick.ac.uk/fac/soc/economics/research/workingpapers/2020/twerp_1255_-_becker.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Nicola Fuchs-Schündeln & Paolo Masella, 2016. "Long-Lasting Effects of Socialist Education," The Review of Economics and Statistics, MIT Press, vol. 98(3), pages 428-441, July.
    2. Sascha O. Becker & Ludger Woessmann, 2013. "Not the Opium of the People: Income and Secularization in a Panel of Prussian Counties," American Economic Review, American Economic Association, vol. 103(3), pages 539-544, May.
    3. Heineck, Guido & Süssmuth, Bernd, 2013. "A different look at Lenin’s legacy: Social capital and risk taking in the Two Germanies," Journal of Comparative Economics, Elsevier, vol. 41(3), pages 789-803.
    4. Lippmann, Quentin & Senik, Claudia, 2018. "Math, girls and socialism," Journal of Comparative Economics, Elsevier, vol. 46(3), pages 874-888.
    5. Matthias Parey & Jens Ruhose & Fabian Waldinger & Nicolai Netz, 2017. "The Selection of High-Skilled Emigrants," The Review of Economics and Statistics, MIT Press, vol. 99(5), pages 776-792, December.
    6. Sascha O. Becker & Ludger Woessmann, 2018. "Social Cohesion, Religious Beliefs, and the Effect of Protestantism on Suicide," The Review of Economics and Statistics, MIT Press, vol. 100(3), pages 377-391, July.
    7. Quentin Lippmann & Claudia Senik, 2018. "Math, Girls and Socialism," Working Papers halshs-01387272, HAL.
    8. Quentin Lippmann & Alexandre Georgieff & Claudia Senik, 2020. "Undoing Gender with Institutions: Lessons from the German Division and Reunification," The Economic Journal, Royal Economic Society, vol. 130(629), pages 1445-1470.
    9. Wolf, Nikolaus, 2009. "Was Germany Ever United? Evidence from Intra- and International Trade, 1885–1933," The Journal of Economic History, Cambridge University Press, vol. 69(3), pages 846-881, September.
    10. Siebert, Horst, 1991. "German unification: the economics of transition," Kiel Working Papers 468, Kiel Institute for the World Economy (IfW Kiel).
    11. Sascha O. Becker & Ludger Woessmann, 2009. "Was Weber Wrong? A Human Capital Theory of Protestant Economic History," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(2), pages 531-596.
    12. Michael Wyrwich, 2017. "Woman and the labour market in East and West Germany: Socialist legacy and pre-socialist tradition," Jena Economics Research Papers 2017-015, Friedrich-Schiller-University Jena.
    13. Quentin Lippmann & Claudia Senik, 2018. "Math, girls and socialism," PSE-Ecole d'économie de Paris (Postprint) halshs-01886562, HAL.
    14. Josh Angrist, 2002. "How Do Sex Ratios Affect Marriage and Labor Markets? Evidence from America's Second Generation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(3), pages 997-1038.
    15. Becker, Sascha & Woessmann, Ludger, 2008. "Luther and the Girls: Religious Denomination and the Female Education Gap in 19th Century Prussia," Stirling Economics Discussion Papers 2008-20, University of Stirling, Division of Economics.
    16. Bauernschuster, Stefan & Falck, Oliver & Gold, Robert & Heblich, Stephan, 2012. "The shadows of the socialist past: Lack of self-reliance hinders entrepreneurship," European Journal of Political Economy, Elsevier, vol. 28(4), pages 485-497.
    17. Avdeenko, Alexandra, 2018. "Long-term evidence of retrospective voting: A natural experiment from the German Democratic Republic," European Economic Review, Elsevier, vol. 103(C), pages 83-107.
    18. Michael Fritsch & Michael Wyrwich, 2014. "The Long Persistence of Regional Levels of Entrepreneurship: Germany, 1925-2005," Regional Studies, Taylor & Francis Journals, vol. 48(6), pages 955-973, June.
    19. Fairlie, Robert W. & Lofstrom, Magnus, 2013. "Immigration and Entrepreneurship," IZA Discussion Papers 7669, Institute of Labor Economics (IZA).
    20. van Hoorn, André & Maseland, Robbert, 2010. "Cultural differences between East and West Germany after 1991: Communist values versus economic performance?," Journal of Economic Behavior & Organization, Elsevier, vol. 76(3), pages 791-804, December.
    21. Rainer, Helmut & Siedler, Thomas, 2009. "Does democracy foster trust?," Journal of Comparative Economics, Elsevier, vol. 37(2), pages 251-269, June.
    22. Quentin Lippmann & Alexandre Georgieff & Claudia Senik, 2020. "Undoing Gender with Institutions: Lessons from the German Division and Reunification," Post-Print halshs-03247392, HAL.
    23. George J. Borjas, 2021. "Self-Selection and the Earnings of Immigrants," World Scientific Book Chapters, in: Foundational Essays in Immigration Economics, chapter 4, pages 69-91, World Scientific Publishing Co. Pte. Ltd..
    24. Pamela Campa & Michel Serafinelli, 2019. "Politico-Economic Regimes and Attitudes: Female Workers under State Socialism," The Review of Economics and Statistics, MIT Press, vol. 101(2), pages 233-248, May.
    25. Alberto Alesina & Nicola Fuchs-Schündeln, 2007. "Goodbye Lenin (or Not?): The Effect of Communism on People," American Economic Review, American Economic Association, vol. 97(4), pages 1507-1528, September.
    26. Boenisch, Peter & Schneider, Lutz, 2013. "The social capital legacy of communism-results from the Berlin Wall experiment," European Journal of Political Economy, Elsevier, vol. 32(C), pages 391-411.
    27. Goldfayn-Frank, Olga & Wohlfart, Johannes, 2020. "Expectation formation in a new environment: Evidence from the German reunification," Journal of Monetary Economics, Elsevier, vol. 115(C), pages 301-320.
    28. Friehe, Tim & Mechtel, Mario, 2014. "Conspicuous consumption and political regimes: Evidence from East and West Germany," European Economic Review, Elsevier, vol. 67(C), pages 62-81.
    29. Axel Möhlmann, 2014. "Persistence or Convergence? The East-West Tax-Morale Gap in Germany," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 70(1), pages 3-30, March.
    30. Christoph Eder & Martin Halla, 2018. "On the Origin of the German East-West Population Gap," Economics working papers 2018-17, Department of Economics, Johannes Kepler University Linz, Austria.
    31. André van Hoorn & Robbert Maseland, 2010. "Cultural Differences Between East and West Germany After 1991: Communist Values vs. Economic Performance?," Post-Print hal-00911822, HAL.
    32. Quentin Lippmann & Alexandre Georgieff & Claudia Senik, 2019. "Undoing Gender with Institutions. Lessons from the German Division and Reunification," SOEPpapers on Multidisciplinary Panel Data Research 1031, DIW Berlin, The German Socio-Economic Panel (SOEP).
    33. Tim Friehe & Markus Pannenberg, 2020. "Time preferences and political regimes: evidence from reunified Germany," Journal of Population Economics, Springer;European Society for Population Economics, vol. 33(1), pages 349-387, January.
    34. Stefan Bauernschuster & Helmut Rainer, 2012. "Political regimes and the family: how sex-role attitudes continue to differ in reunified Germany," Journal of Population Economics, Springer;European Society for Population Economics, vol. 25(1), pages 5-27, January.
    35. Becker, Sascha O. & Nagler, Markus & Wößmann, Ludger, 2017. "Education and religious participation," Munich Reprints in Economics 49880, University of Munich, Department of Economics.
    36. Brosig-Koch, Jeannette & Helbach, Christoph & Ockenfels, Axel & Weimann, Joachim, 2011. "Still different after all these years: Solidarity behavior in East and West Germany," Journal of Public Economics, Elsevier, vol. 95(11), pages 1373-1376.
    37. Dragone, Davide & Ziebarth, Nicolas R., 2017. "Non-separable time preferences, novelty consumption and body weight: Theory and evidence from the East German transition to capitalism," Journal of Health Economics, Elsevier, vol. 51(C), pages 41-65.
    38. Sascha O. Becker & Ludger Woessmann, 2008. "Luther and the Girls: Religious Denomination and the Female Education Gap in Nineteenth‐century Prussia," Scandinavian Journal of Economics, Wiley Blackwell, vol. 110(4), pages 777-805, December.
    39. Grogger, Jeffrey & Hanson, Gordon H., 2011. "Income maximization and the selection and sorting of international migrants," Journal of Development Economics, Elsevier, vol. 95(1), pages 42-57, May.
    40. Michael Wyrwich, 2019. "Historical and current spatial differences in female labour force participation: Evidence from Germany," Papers in Regional Science, Wiley Blackwell, vol. 98(1), pages 211-239, February.
    41. George A. Akerlof & Andrew K. Rose & Janet L. Yellen & Helga Hessenius, 1991. "East Germany in from the Cold: The Economic Aftermath of Currency Union," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(1), pages 1-106.
    42. Beblo, Miriam & Görges, Luise, 2018. "On the nature of nurture. The malleability of gender differences in work preferences," Journal of Economic Behavior & Organization, Elsevier, vol. 151(C), pages 19-41.
    43. Quentin Lippmann & Alexandre Georgieff & Claudia Senik, 2020. "Undoing Gender with Institutions: Lessons from the German Division and Reunification," PSE-Ecole d'économie de Paris (Postprint) halshs-03247392, HAL.
    44. Eder, Christoph & Halla, Martin, 2018. "On the Origin and Composition of the German East-West Population Gap," IZA Discussion Papers 12031, Institute of Labor Economics (IZA).
    Full references (including those not matched with items on IDEAS)

    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. Helmut Rainer & Clara Albrecht & Stefan Bauernschuster & Anita Fichtl & Timo Hener & Joachim Ragnitz & Anita Dietrich, 2018. "Deutschland 2017 - Studie zu den Einstellungen und Verhaltensweisen der Bürgerinnen und Bürger im vereinigten Deutschland," ifo Forschungsberichte, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 96, September.
    2. Friedman-Sokuler, Naomi & Senik, Claudia, 2020. "From Pink-Collar to Lab Coat: Cultural Persistence and Diffusion of Socialist Gender Norms," IZA Discussion Papers 13385, Institute of Labor Economics (IZA).
    3. Lange, Martin, 2021. "The legacy of state socialism on attitudes toward immigration," Journal of Comparative Economics, Elsevier, vol. 49(3), pages 733-750.
    4. Telmo Pérez‐Izquierdo & Elizaveta Pronkina, 2023. "Behind the curtain: How did women's work history vary across Central and Eastern Europe?," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 31(2), pages 465-489, April.
    5. Dilmaghani, Maryam, 2021. "The gender gap in competitive chess across countries: Commanding queens in command economies," Journal of Comparative Economics, Elsevier, vol. 49(2), pages 425-441.
    6. Tim Friehe & Markus Pannenberg, 2020. "Time preferences and political regimes: evidence from reunified Germany," Journal of Population Economics, Springer;European Society for Population Economics, vol. 33(1), pages 349-387, January.
    7. Sascha O. Becker & Lukas Mergele & Ludger Wößmann, 2021. "Es liegt nicht alles am Sozialismus — über Ost-West-Unterschiede und ihre Ursprünge [It Is Not All Because of Socialism — On East-West Differences and Their Origins]," Wirtschaftsdienst, Springer;ZBW - Leibniz Information Centre for Economics, vol. 101(1), pages 32-36, March.
    8. Deter, Max & Lange, Martin, 2023. "Are the supporters of socialism the losers of capitalism? Conformism in East Germany and transition success," European Journal of Political Economy, Elsevier, vol. 76(C).
    9. Jaanika Meriküll & Maryna Tverdostup, 2020. "The Gap That Survived The Transition: The Gender Wage Gap Over Three Decades In Estonia," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 127, Faculty of Economics and Business Administration, University of Tartu (Estonia).
    10. Costa-Font, Joan & Nicińska, Anna, 2023. "Comrades in the family? Soviet communism and demand for family insurance," LSE Research Online Documents on Economics 118472, London School of Economics and Political Science, LSE Library.
    11. Tim Friehe & Markus Pannenberg & Michael Wedow, 2015. "Let Bygones be Bygones? Socialist Regimes and Personalities in Germany," CESifo Working Paper Series 5440, CESifo.
    12. Trang Thu Do & Kien Nguyen-Trung & Chau Hai Le, 2023. "North–South discrepancy and gender role attitudes: evidence from Vietnam," Asia-Pacific Journal of Regional Science, Springer, vol. 7(1), pages 159-178, March.
    13. Bondar Mariia & Fuchs-Schündeln Nicola, 2023. "Good Bye Lenin Revisited: East-West Preferences Three Decades after German Reunification," German Economic Review, De Gruyter, vol. 24(1), pages 97-119, February.
    14. Pannenberg, Markus & Friehe, Tim & Wedow, Michael, 2015. "Let Bygones be Bygones? Political Regimes and Personalities in Germany," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112841, Verein für Socialpolitik / German Economic Association.
    15. Jessen, Jonas, 2022. "Culture, children and couple gender inequality," European Economic Review, Elsevier, vol. 150(C).
    16. Beblo, Miriam & Görges, Luise, 2018. "On the nature of nurture. The malleability of gender differences in work preferences," Journal of Economic Behavior & Organization, Elsevier, vol. 151(C), pages 19-41.
    17. Eder, Christoph & Halla, Martin, 2018. "On the Origin and Composition of the German East-West Population Gap," IZA Discussion Papers 12031, Institute of Labor Economics (IZA).
    18. Max Deter, 2020. "Are the Losers of Communism the Winners of Capitalism? The Effects of Conformism in the GDR on Transition Success," SOEPpapers on Multidisciplinary Panel Data Research 1102, DIW Berlin, The German Socio-Economic Panel (SOEP).
    19. Estefanía Galván, 2022. "Gender Identity and Quality of Employment," Economica, London School of Economics and Political Science, vol. 89(354), pages 409-436, April.
    20. Pronkina, Elizaveta & Berniell, Inés & Fawaz, Yarine & Laferrère, Anne & Mira, Pedro, 2023. "The COVID-19 curtain: Can past communist regimes explain the vaccination divide in Europe?," Social Science & Medicine, Elsevier, vol. 321(C).

    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-

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    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:wrk:warwec:1255. 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: Margaret Nash (email available below). General contact details of provider: https://edirc.repec.org/data/dewaruk.html .

    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.