Multinational firms transfer to their foreign affiliates superior technology, leading to higher productivity of their workers and therefore to higher wages, or so the often cited rent-sharing theory of multinational firms explains. But studies have shown that oftentimes, this results not from...

Agglomeration economies may impact on productivity in different ways. Up to now, only a few papers try to provide evidence on the underlying mechanisms that might give rise to a positive correlation between agglomeration and wages. In this analysis we focus on the matching mechanism, i.e. the...

In the process of European integration, regions close to a border are especially affected by labour market liberalisation. Using data from the IAB employment subsample (IABS) and the employment register (BeH) for the period before and after the opening of the border (1980-2001) I shed light on...

High poverty rates as well as a very unequal distribution of income and wealth are distinctive features of post Apartheid South Africa. Studies analysing the extent of income inequality show that since the end of Apartheid the distribution of income has at best not changed at all, but depending...

I test some predictions of Gary Becker’s theory of taste discrimination regarding discrimination of foreigners by employers, co-workers and customers. I combine a 2% sample of the German working population and a 50% sample of German plants with low-level regional data, including the vote...

We exploit regional differences in labour market density to conduct a simple empirical test of dynamic monopoly and selection wage theories. According to selection wage theories employers offer above-average wages in order to attract more applicants. This allows them to be choosier and to select...

We demonstrate that almost one half of the observed wage gap between East and West Germany reflects differences in worker, establishment, and regional characteristics rather than differences in productivity at the establishment level. Regional price and establishment size differentials alone...

Differences in regional labour market conditions are still pronounced in Germany, especially between the Eastern and the Western part. Traditional neoclassical models imply that labour mobility should reduce disparities. In contrast, models that include externalities or selective migration...

In most of the developed countries the number of low-skilled workers decreased and the number of high-skilled workers increased. However, it is far from clear whether and how this change in the skill composition of the employees affects the evolution of regional employment disparities....

This empirical paper wants to analyze determinants for regional differences in German unemployment rates using a spatial panel model. The analysis of regional differences is of particular interest in the German case due to its specific history. Twenty-two years after German reunification, there...