This paper uses micro data to analyze the wage structures in East Germany and West Germany before and after unification. In 1988, the wage distribution in East Germany was much more compressed than in West Germany or in the U.S. Since the collapse of Communism and unification with West Germany,...

Unlike prototype immigration countries, Germany has attracted a large number of southern Europeans as temporary guestworkers in the 60s and 70s. Nevertheless, many of them have stayed on and intend to remain in Germany. I investigate whether these workers have become successfully integrated into...

In this paper I study a model of life-cycle consumption in which individuals react optimally to their own income process but ignore economy wide information. Since individual income is less persistent than aggregate income consumers will react too little to aggregate income variation. Aggregate...