Changing Fortunes During Economic Transition Low-Wage Persistence Before and after German Unification

摘要: This paper studies whether the transition from a centrally planned to market economy offers new perspectives for those who, in economic terms, were relatively deprived under old regime. Previous empirical research on this question has been limited by availability of representative longitudinal micro-data that track individuals' labour careers across different political regimes. Our study seeks fill gap looking at the transition Eastern Germany following German Unification. Using unique large-scale administrative data set, we measure relative position exploiting information individuals were bottom pre-unification wage distribution. We then address the question how workers' low or high-wage status determines their and within document strong evidence dynamic selection process into low-wage employment after Uni-fication. Furthermore, consistent with weak connection between true productivity status, extent regime state dependence is found be small magnitude appears to vanish over time. For males, most pronounced among medium high-skilled, suggesting depreciation general human capital as potential explanation.