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dc.contributor.authorFrijters, Paulen_US
dc.contributor.authorHaisken-DeNew, John P.en_US
dc.contributor.authorShields, Michael A.en_US
dc.date.accessioned2009-01-28T16:22:27Z-
dc.date.available2009-01-28T16:22:27Z-
dc.date.issued2002en_US
dc.identifier.urihttp://hdl.handle.net/10419/21442-
dc.description.abstractIn this paper we test the Rational Expectations hypothesis using longitudinal data on expectations and realizations of individual welfare for East Germans in the years following reunification. German reunification was unexpected and delivered a large shock to the future prospects of the inhabitants of the former East Germany. We therefore take it as a 'natural' experiment through which to study the rationality of expectations. Our results show that East Germans significantly over-estimated the welfare gains immediately following reunification. The prediction error was largest for the young, the poorly educated and those with children. However, expectations and realizations of life satisfaction in East Germany had converged by 1995, at a level considerably below that of West Germans. We hence conclude that expectations were close to rational after the dust of reunification had settled, but that expectations are not likely to be rational in times of great transition or volatility.en_US
dc.language.isoengen_US
dc.publisheren_US
dc.relation.ispartofseriesIZA Discussion paper series 498en_US
dc.subject.jelZ1en_US
dc.subject.jelI31en_US
dc.subject.jelC25en_US
dc.subject.jelC23en_US
dc.subject.ddc330en_US
dc.subject.keywordwelfareen_US
dc.subject.keywordlife satisfactionen_US
dc.subject.keywordrational expectationsen_US
dc.subject.keywordlearningen_US
dc.subject.keywordGerman reunificationen_US
dc.subject.stwLebensstandarden_US
dc.subject.stwLebensqualitäten_US
dc.subject.stwRationale Erwartungen_US
dc.subject.stwLernprozeßen_US
dc.subject.stwSchätzungen_US
dc.subject.stwNeue Bundesländeren_US
dc.subject.stwNationale Einheiten_US
dc.subject.stwDeutschlanden_US
dc.subject.stwLebenszufriedenheiten_US
dc.titleIndividual Rationality and Learning: Welfare Expectations in East Germany Post-Reunificationen_US
dc.typeWorking Paperen_US
dc.identifier.ppn352256192en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)
Publikationen von Forscherinnen und Forschern des DIW

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