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Provides an evaluation of the reality of the German economy after unification, also answers to some of the questions that the post‐unification era has raised, analyzes aggregate and sectoral data of the former GDR and the Federal Republic of Germany over the period 1970‐1989. The results characterize the former GDR with a steeper supply curve. While the central plan assumed a steady growth of real output over time, it eliminated producers’ incentives to vary capacity utilization in response to demand pressures. Demand pressures proved inflationary without determining conditions in the labor market. In contrast, the market‐oriented plan in West Germany tied output expansion and contraction with demand fluctuations. Consequently, inflationary effects of demand fluctuations appeared moderate in West Germany and real output growth was not sustained at a high level over time. Demand fluctuations determined employment changes in West Germany. Implications of these differences are analyzed in light of the reality of the post‐unification in Germany.

Income inequality rose in Germany since the 1970s. To quantify the impact of different socio-economic trends on inequality, the author constructs counterfactual distributions of net household income with rich German data from the Microcensus in 1976 and 2011. The procedure allows to study the effect of marital sorting in education and includes indirect effects such as the influence of education on employment. When comparing the income distribution in West Germany for 1976 and 2011, the author finds that the prevalence of singlehood accounts to a large extent for the observed increase in inequality. The inequality increase is also associated with a change of employment among males and single females. When comparing West and East Germany in 2011, the author finds that the stronger labour market attachment of East German married females combined with the high East German unemployment produces even more income inequality than the West German employment structure. Moreover, the smaller household size boosts inequality in East Germany, whereas education works against it. In both comparisons, the author finds no significant impact of positive assortative mating in education or ageing.

Reports a recent international study trip (a group of university professors and scholars) giving an opportunity to experience first‐hand the changes involved in unifying the two Germanies, and extending the realm of capitalism and a free‐market system to Russia and to witness examples of the systematic gap between East and West caused by decades of social, political and economic value systems. The visit included the German Chamber of Commerce, a tour of a former East German machine tool factory, Treuhandanstalt – the government organization responsible for privatizing East German businesses, the Free University and Humboldt University, and numerous talks by educational and governmental leaders. Outlines the findings and adds comments from speakers, further analysis on the unification progress to date, and information on future challenges.

In this chapter, we evaluate the employment effects of job-creation schemes (JCS) on the participating individuals in Germany. JCS are a major element of active labour market policy in Germany and are targeted at long-term unemployed and other hard-to-place individuals. Access to very informative administrative data of the Federal Employment Agency justifies the application of a matching estimator and allows us to account for individual (group-specific) and regional effect heterogeneity. We extend previous studies for Germany in four directions. First, we are able to evaluate the effects on regular (unsubsidised) employment. Second, we observe the outcomes of participants and non-participants for nearly three years after the programme starts and can therefore analyse medium-term effects. Third, we test the sensitivity of the results with respect to various decisions that have to be made during implementation of the matching estimator. Finally, we check if a possible occurrence of a specific form of ‘unobserved heterogeneity’ distorts our interpretation. The overall results are rather discouraging, since the employment effects are negative or insignificant for most of the analysed groups. One exception are long-term unemployed individuals who benefit from participation at the end of our observation period. Hence, one policy implication is to address the programmes to this problem group more closely.

This paper studies the entrepreneurial undertaking and economic success of immigrants and natives in Germany, namely the West Germans, the East Germans, the guestworkers, and other immigrants.

The paper studies factors that affect the sorting of individuals into self‐employment and investigate whether the self‐employed fare better than the paid‐employed, and whether self‐employed immigrants fare better than Germans. Employing data from the German Socioeconomic Panel both the probability to choose self‐employment through a probit and the selection adjusted earnings are estimated.

The paper finds that the probability of self‐employment increases significantly with age for all ethnicity groups. More education and a self‐employed father propel self‐employment choices for West Germans only. Immigrants are rather pushed into self‐employment to avoid unemployment; however, they are able to traverse the socioeconomic gap through self‐employment. Except for the East Germans, the self‐employed earn more than their salaried counterparts, and immigrants fare the best, having the highest earnings of all groups. For immigrants, entrepreneurship maybe a way of “making” it in the new country. While self‐employment is a lucrative choice for immigrants, their rates remain low.

This study produces new empirical evidence on the importance of the self‐employment sector in Germany, where individuals fare well and where immigrants can achieve earnings over‐assimilation compared to natives and higher occupational prestige.

Describes the basic conditions created by monetary union of the two German states in mid‐1990 for Western retail companies to establish businesses in former East Germany. Major obstacles include uncertainty about the ownership of property, the poor market economy knowledge of the locally employed staff and the low density of the telecommunications network. The lack of large surface stores led to the construction of superstore tents. Non‐German retail companies are not yet big players in East Germany. At first local brands were abandoned by consumers in the East but are now being relaunched.

The second Frankfurt Career Study was conducted in 2017 in East and West Germany to analyze the impact of motherhood on female professional advancement in the specific national context of Germany. In addition, this study aims to present a unique perspective of the similarities and dissimilarities between the Western and Eastern parts of the country.

The research is presented as a three-stage statistical approach based on quantitative data generated from a survey conducted among 2,130 working mothers. In the first step, the authors performed a multiple correspondence analysis to explore the relationships between important categorical variables. Using the object scores obtained in the first step, we then ran a hierarchical cluster analysis, followed by the third and last step: using the k-means clustering method to partition the survey respondents into groups.

The authors found that working mothers in Germany are distributed according to four clusters mainly described by demographics and orientation toward work. East Germany has been found as a more egalitarian context than West Germany with respect to family system arrangements. However, the upper bound of the sample in West Germany presented an atypical female breadwinner model in high-performance households.

The authors want to contribute to previous investigations on the topic by providing a more comprehensive view of the phenomenon, especially comparing the two different family systems and social norms from the Eastern and Western parts of the country. The authors ask whether and how career perspectives and female labor supply are influenced by drivers such as work–family conflict determinants, working mothers demographics, partner support and employer support.

A large‐scale survey was conducted to assess “attitudes towards risk and safety at work”, and more general attitudes to work among vets four to five years after German unification. Clear differences were observed between the old (West) and new (East) Federal States of Germany. Stress levels were significantly higher in the new Federal States but, interestingly, the city of Berlin shared the low stress features of employees in the former West Germany. Social cohesion or working climate was generally perceived more favourably in the new Federal States. Satisfaction at work was not significantly related to job stress, and did not show such clear differences between new and old federal States. Individuals from the new federal States were more emotional in their driving styles, less risk‐taking and more safety conscious than their colleagues in the older federal States. The implications of these findings are discussed.

This paper addresses the perceived closeness of the relation between East and West German adult children and their parents who no longer live in the same household. The empirical analyses are based on the German Socio‐Economic Panel (GSOEP). They show that East German family relations are closer than West German relations. Regarding the causes for closer or weaker relations for East and West Germans there are both similarities and differences. For example, the empirical analyses indicate differences regarding the importance of standard of living, birth cohort, and religion.

Economic mobility means different things to different people, but four major classes of mobility measures have been identified in the literature: positional, directional, mobility as an equaliser of long-term earnings, and earnings risk (or flux). We illustrate some advantages of a multifaceted approach by comparing German and American earnings mobility using multiple indices from each of the four major classes for three panels of 10-year intervals. We anticipate and confirm that due to extensive differences in the German and American labour markets and in other social institutions that influence labour market outcomes, each country dominates in one facet of mobility but not in the others. Thus, a multifaceted approach contributes to a better understanding of the strengths and weakness of the two systems.