Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractThis paper deals with the labor market entrance of young people in the Federal Republic of Germany. The main focus is on failures during this stage. First, an overview of the youth labor market in Germany is given. Then, the transition from vocational training to work is analyzed: The duration of the first spell of non-employment after completition of formal vocational training is analyzed by means of a proportional hazard function approach. Besides the strong influence of the human capital variables there is a striking effect of the family background of the youths. The following section addresses as to what extent early failures in the work history have long-lasting effects on future incomes.

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Reasons for Wage Rigidity in GermanyWolfgang Franz Friedhelm Pfeiffer The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit company supported by Deutsche Post World Net. The center is associated with the University of Bonn and offers a stimulating research environment through its research networks, research support, and visitors and doctoral programs. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. ABSTRACT Reasons for Wage Rigidity in Germany *This study investigates institutional and economic reasons for downward wage rigidity regarding three occupational skill groups. Based on a survey of 801 firms in Germany and an econometric analysis, we find strong support for explanations based on the effects of labour union contracts and efficiency wages that differ between skill groups. Survey respondents indicate that labour union contracts and implicit contracts are important reasons for wage rigidity for the (less) skilled. Specific human capital and negative signals for new hires are causes of the stickiness of wages for the highly skilled. Compared with US evidence, German firms seem to attach more importance to labour union contracts and specific human capital.JEL Classification: J41, J51, K31

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We analyze wage developments in the East German transition process both at the macro and at the microeconomic level. At the macroeconomic level, we draw special attention to the important distinction between product and consumption wages, describe the development of various wage measures, labor productivity and unit labor costs in East Germany in relation to West Germany, and relate these developments to the system of collective wage bargaining. At the microeconomic level, we describe changes in the distribution of hourly wages between 1990 and 1997 and analyze the economic factors determining these changes by way of empirical wage functions estimated on the basis of the Socio-Economic Panel for East Germany. The paper also draws some conclusions on the likely future course of the East-West German wage convergence process.Nominal wages in East Germany increased dramatically in the first years after unification, which had very different effects on labor costs on the one hand, and the standard of living of East Germans on the other. Unit labor costs skyrocketed at the beginning of the transition process and have since come down only slightly still exceeding the West German level still by a wide margin. This resulted in a dramatic decline of employment and extremely high unemployment rates in East Germany, which implies that observed productivity increases do not represent real productivity gains in the East German economy and can therefore not be distributed to workers without causing excessive unemployment.While East German wages increased substantially throughout the wage distribution, there was also a pronounced increase in wage inequality. The upper ranks of the wage distribution saw the highest increases in real wages although there were also marked improvements for the lower ranks. By 1997, overall wage inequality for East German men has reached roughly the same level as in West Germany, while female wages in East Germany are distributed much more unequally than in West Germany now.The pronounced upward-shift of the female wage-experience profile in the public sector together with the substantial increase of the share of women working in this sector is an important factor for the observed gender differences in the development of the East German wage distribution after unification. To a large extent, this also explains the fact that the still existing wage differential between East and West Germany has become much smaller for women than for men. However, it seems unlikely that the very large share of women working in the public sector, often employed on heavily subsidized public works programs, is sustainable in the future. In the private sector of the East German economy it will still take a long time before wages have reached West German levels. Wages in the East German Transition ProcessFacts and Explanations Wolfgang Franz and Viktor Steiner Zentrum für Europäische Wirtschaftsforschung (ZEW) Centre for European Economic Research Mannheim June 1999Abstract: We analyze wage developments in the East German t...

We analyze wage developments in the East German transition process both at the macro and at the microeconomic level. At the macroeconomic level, we draw special attention to the important distinction between product and consumption wages, describe the development of various wage measures, labor productivity and unit labor costs in East Germany in relation to West Germany, and relate these developments to the system of collective wage bargaining. At the microeconomic level, we describe changes in the distribution of hourly wages between 1990 and 1997 and analyze the economic factors determining these changes by way of empirical wage functions estimated on the basis of the Socio-Economic Panel for East Germany. The paper also draws some conclusions on the likely future course of the East-West German wage convergence process.Nominal wages in East Germany increased dramatically in the first years after unification, which had very different effects on labor costs on the one hand, and the standard of living of East Germans on the other. Unit labor costs skyrocketed at the beginning of the transition process and have since come down only slightly still exceeding the West German level still by a wide margin. This resulted in a dramatic decline of employment and extremely high unemployment rates in East Germany, which implies that observed productivity increases do not represent real productivity gains in the East German economy and can therefore not be distributed to workers without causing excessive unemployment.While East German wages increased substantially throughout the wage distribution, there was also a pronounced increase in wage inequality. The upper ranks of the wage distribution saw the highest increases in real wages although there were also marked improvements for the lower ranks. By 1997, overall wage inequality for East German men has reached roughly the same level as in West Germany, while female wages in East Germany are distributed much more unequally than in West Germany now.The pronounced upward-shift of the female wage-experience profile in the public sector together with the substantial increase of the share of women working in this sector is an important factor for the observed gender differences in the development of the East German wage distribution after unification. To a large extent, this also explains the fact that the still existing wage differential between East and West Germany has become much smaller for women than for men. However, it seems unlikely that the very large share of women working in the public sector, often employed on heavily subsidized public works programs, is sustainable in the future. In the private sector of the East German economy it will still take a long time before wages have reached West German levels. Wages in the East German Transition ProcessFacts and Explanations Wolfgang Franz and Viktor Steiner Zentrum für Europäische Wirtschaftsforschung (ZEW) Centre for European Economic Research Mannheim June 1999Abstract: We analyze wage developments in the East German t...