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Title:Firm specific wage spread in Germany: decomposition of regional differences in inter firm wage dispersion PDF Logo
Authors:Görzig, Bernd
Gornig, Martin
Werwatz, Axel
Issue Date:2006
Series/Report no.:SFB 649 discussion paper 2006,045
Abstract:The purpose of this paper is to sort out firm-related differences from effects that result from different economic structures. A non-parametric decomposition is used to analyse firm level difference between the wage spread in the two major regions of unified Germany. If firm-specific effects explain wage dispersion between firms, a decomposition of the wage dispersion between firms is necessary. The decomposition can help to find out, whether the economy-wide results for different regions are due to the composition of the regional economies by industries and firm-size, or whether the differences are due to firm-specific influences, like distinctions in market power. For Germany, a considerable part of the difference in the wage spread between the East and the West can be explained by different economic structures. However, by far the greater part of the difference in the wage spread between firms in the two parts of the country results from lower wages paid by firms of the same type in East Germany compared with their counterparts in West Germany.
Subjects:Productivity
Wage Differentiation
Wage Spread
Firm Wage Levels
Wage Sharing
Non Parametric Analysis
Decomposition
JEL:L16
C14
J30
Document Type:Working Paper
Appears in Collections:Publikationen von Forscherinnen und Forschern des DIW
SFB 649 Discussion Papers, HU Berlin

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