Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/70916 
Year of Publication: 
2012
Series/Report no.: 
Working Paper No. 118
Publisher: 
Universität Leipzig, Wirtschaftswissenschaftliche Fakultät, Leipzig
Abstract: 
What are the long-term effects of Communism on economically relevant notions such as social trust, fairness, and scope of cooperation? To answer this question, we study the post-unification trajectory of convergence between East and West German individuals with regard to trust, cooperation, and risk. Our hypotheses are derived from a model of German unification that incorporates individual responses both to incentives and to values inherited from earlier generations as recently suggested in the literature. Using two waves of balanced panel data, we find that despite twenty years of unification East Germans are still characterized by a persistent level of social distrust. In comparison to West Germans, they are less inclined to see others as cooperative. East Germans are also found to have been more risk loving than West Germans. However, risk attitudes fully converged recently.
Subjects: 
Social trust
Risk Attitudes
Political Regimes
German Unification
JEL: 
P51
Z13
Document Type: 
Working Paper

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