A political miracle occurred when Germany was reunited, and at first glance an economic miracle has followed. Real incomes in the east have now reached the western level, and investment per capita has been much higher than in the west. However, every third deutschmark spent in the east has been...

We examine financial literacy in Germany using data from the SAVE survey. We find that knowledge of basic financial concepts is lacking among women, the less educated, and those living in East Germany. In particular, those with low education and low income in East Germany have little financial...

Drawing on representative household data from the German Socio-Economic Panel, we examine the role of an early precursor of entrepreneurial development – parental role models – for the individual decision to become self-employed in the post-unified Germany. The findings suggest that the...

We use the fall of the Berlin Wall in 1989 to show that personal relationships which individuals maintain for non-economic reasons can be an important determinant of regional economic growth. We show that West German households who have social ties to East Germany in 1989 experience a persistent...

In this paper we first document inequality trends in wages, hours worked, earnings, consumption, and wealth for Germany from the last twenty years. We generally find that inequality was relatively stable in West Germany until the German unification (which happened politically in 1990 and in our...

Italy and Germany have similar geographical differences in productivity – North more productive than South in Italy; West more productive than East in Germany – but have adopted different models of wage bargaining. Italy sets wages based on nationwide contracts that allow for limited local...

In 1988, the wage distribution in East Germany was much more compressed than in West Germany or the U.S. Since the collapse of Communism and unification with West Germany, however, the wage structure in eastern Germany has changed considerably. In particular, wage variation has increased, the...

Preferences for redistribution, as well as the generosities of welfare states, differ significantly across countries. In this paper, we test whether there exists a feedback process of the economic regime on individual preferences. We exploit the quot;experimentquot; of German separation and...

Overeducation is an often overlooked facet of untapped human resources. But who is overeducated and why? Relying on SOEP data 1984-2011, we use probit models for estimating the likelihood of entering overeducation and dynamic mixed multinomial logit models with random effects addressing state...

Germany's occupational and sectoral change towards a knowledge-based economy calls for high returns to education. Nevertheless, female graduates are paid much less than their male counterparts. We wonder whether overeducation affects sexes differently and whether this might answer for part of...