Empirica
Volume 34, Issue 4, 2007, Pages 371-395

Do the best go west? An analysis of the self-selection of employed East-West migrants in Germany (Article)

Brücker H.* , Trübswetter P.
  • a Institute for Employment Research (IAB), Weddigenstr 20-22, 90237 Nürnberg, Germany, Institute for the Study of Labor (IZA), Bonn, Germany
  • b Department of Economics, University Erlangen-Nuremberg, Erlangen, Germany

Abstract

Since the inequality of earnings in East Germany has approached West German levels in the late 1990s, the standard Roy model predicts that a positive selection bias of East-West migrants should disappear. Using a switching regression model and data from the IAB-employment sample, we find however that employed East-West migrants remain positively self-selected with respect to unobserved abilities. This result is consistent with the predictions of our extended Roy model which considers moving costs that are negatively correlated with labour market abilities of individuals. Moreover, we find that wage differentials as well as differences in employment opportunities are the central forces which drive East-West migration after unification. © Springer Science+Business Media B.V. 2007.

Author Keywords

Migration East Germany Self-selection

Index Keywords

labor migration wage gap numerical model regression analysis german federal republic german democratic republic labor market employment
Link
https://www.scopus.com/inward/record.uri?eid=2-s2.0-34547635647&doi=10.1007%2fs10663-006-9031-y&partnerID=40&md5=d225a7e6bd277d1a5236ab71f79762d0
DOI: 10.1007/s10663-006-9031-y
ISSN: 03408744
Cited by: 28
Original Language: English