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New publication: “Reservation wages: still differences between East and West”

Christoph Weber and Philipp Dees have investigated the differences in reservation wages for Western and Eastern Germany, published in WSI-Mitteilungen (68 (8), pp. 593-603. The abstract: “Almost twenty-five years after German reunification there is still a significant difference between the minimum wages that East and West Germans expect when applying for a job. That means that not only does a wage gap still exist between East and West Germany, but also that the reservation wages in the east are lower. As the analysis presented in this article shows, this difference still remains when a range of wage expectations are taken into account, such as, for example, sectoral and qualification components, or the levels of rent for housing. Results indicate that the existing low wage level in East Germany also lowers the reservation wage and thereby reinforces the wage gap. With a view to the politically and socially desired aim of bringing east and west wages into line, this presents a challenge.” You may access the full text (in German) from the University’s network via this link: http://www.boeckler.de/wsi-mitteilungen_62503_62551.htm