A Detailed Decomposition of Changes in Wage Inequality in Reunified Post-Transition Germany 1999-2006: Accounting for Sample Selection

Abstract

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. This series presents research findings based either directly on data from the German SocioEconomic Panel Study (SOEP) or using SOEP data as part of an internationally comparable data set (e.g. CNEF, ECHP, LIS, LWS, CHER/PACO). SOEP is a truly multidisciplinary household panel study covering a wide range of social and behavioral sciences: economics, sociology, psychology, survey methodology, econometrics and applied statistics, educational science, political science, public health, behavioral genetics, demography, geography, and sport science. Terms of use: Documents inThe decision to publish a submission in SOEPpapers is made by a board of editors chosen by the DIW Berlin to represent the wide range of disciplines covered by SOEP. There is no external referee process and papers are either accepted or rejected without revision. Papers appear in this series as works in progress and may also appear elsewhere. They often represent preliminary studies and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be requested from the author directly. conclude that after 1999, changes in wage inequality in Germany can be explained by both; changes in workers characteristics and changes in the wage structure, and not by changes in the wage structure alone, as the case has been during the transition process in the first decade after reunification.JEL Classification: D30, J31

Changes in the Gender Wage Gap in Germany During a Period of Rising Wage Inequality 1999 – 2006: Was it Discrimination in the Returns to Human Capital?

“…Therefore, the results reported in this article and those of Al-farhan (2010) confirm that the positive association between rising levels of wage inequality and widening gender wage gaps does indeed exist, not only in international comparisons, as indicated by Kahn (1996), (1997), (2003) and (2006), but also across time using data from the same population, regardless of where we are in the wage distribution. In other words, it is not only true that countries with relatively higher levels of wage inequality experience larger gender wage gaps, but also periods of rising levels of wage inequality in a particular country are marked with simultaneously widening gender wage gaps in all segments of that country's wage distribution.…”

“…Blau and Kahn have pioneered the analysis of international differences in gender wage gaps, and concluded in various occasions that countries with relatively higher levels of wage inequality also exhibit wider gender wage differentials. Hence this article comes to explore this positive association between inequality and gender wage gaps using the same data and sample period that have been employed in Al-farhan (2010) to verify the existence of such a relationship across time. In other words, I intend to answer the question whether gender wage gaps would increase simultaneously as wage inequality rises using data from the same population instead of conducting an international comparison.…”

“…In other words, I intend to answer the question whether gender wage gaps would increase simultaneously as wage inequality rises using data from the same population instead of conducting an international comparison. The wage equations that underlie the analysis of changes in the gender wage gaps in this article include the same variables that were included in the wage equations in Al-farhan (2010). Therefore, I will be able to explore whether the variables that mainly caused the rising wage inequality would also be important in explaining changes in the 3 gender wage gap.…”

“…Therefore, this article shows that it is not only true that countries with relatively higher levels of wage inequality experience larger gender wage gaps, but also periods of rising levels of wage inequality in a particular country are marked with simultaneously widening gender wage gaps. In particular, it will be shown that the variables that mainly explained the rising levels of wage inequality in Al-farhan (2010) are also crucial in explaining the increases in the gender wage gap. These variables were mainly potential experience, worker's company sizes and worker's occupational position and their occupation/training match.…”

Inequality-Adjusted Gender Wage Differentials in Germany

“…Smolny and Kirbach (2011) observe that the gender wage gap is one of the few statistics for which there is no convergence to Western levels in the period 1990-2008. At the same time, Germany recently experienced an increase in overall wage inequality; see, e.g., Dustmann et al (2009);Fuchs-Schündeln et al (2010); Card et al (2013). According to Al-Farhan's (2010b) analysis of the German Socio-Economic Panel (SOEP) data, the wage distribution in Germany appeared to stabilize at historically high levels of inequality in the recent ten years, while Antonczyk et al (2010Antonczyk et al ( , 2011 still find increasing wage inequality between 2001 and 2006 using Structure of Earnings data. Observing high levels of wage inequality with a large gender gap in pay is consistent with the demonstration by Blau and Kahn (1992, 1997) that wage inequality is positively associated to the gender pay gap.…”