Catching-up of East German Labour Productivity in the 1990s

Abstract

We provide empirical evidence for exogenous and endogenous catching-up of East German labour productivity to West German levels. We argue that labour productivity in East Germany has caught up faster than has happened elsewhere. The sudden formation of the German Monetary Union was followed by large transfers to East Germany, migration of workers to West Germany, reorganization and privatization of East German firms. This has quickly led to a partial closing of the organizational, idea and object gaps that existed between East and West Germany. This paper analyses labour productivity in East and West Germany using both aggregate German data and unbalanced panel analysis of developments in East and West Germany. Factors affecting the organization of production, and especially privatization and 'foreign' firms, are found to be particularly important in this context. Copyright Verein fü Socialpolitik and Blackwell Publishers Ltd 2000.

A distribution dynamics approach to regional GDP convergence in unified Germany

“…These numbers illustrate that, although East German labor market regions have increased their relative GDP per worker over time, they still have considerably lower levels of GDP per worker than the national average. This finding is well compatible with other studies, such as Barell and te Velde (2000). It is also noteworthy that, nowadays, a small number of East German regions performs remarkably well (examples are Dresden and Magdeburg).…”

“…2 See Hallett and Ma (1993), Burda and Funke (1995), Funke and Strulik (2000), and Barrell and te Velde (2000).…”

Regional Age Structure and Economic Growth: An Econometric Study for German Regions

“…Model 4 is robust against outliers using weighted regression techniques 8 . Model 5 reports the results of a spatial lag model using a distance based and row standardized weighting matrix which moderately discounts distance 9 . Again there are robust standard errors.…”

Regional Convergence in Germany: a Geographically Weighted Regression Approach

“…200) to the Solow model. Human capital is important, because this production factor explains tendencies towards convergence in East Germany at the beginning of the 1990s (Barrel/Velde 2000). The production function of type Cob-Douglas in period t is given by:…”

“…An important indicator is also labour productivity. Barrel and Velde (2000) provide empirical evidence for a catching-up process of East Germany compared to West Germany. They estimate unbalanced panel models and identify the emergence of West German firms besides exogenous and endogenous technical processes as important factors.…”