Wage mobility in East and West Germany

This article studies long run wage mobility as a characteristic of regional labor markets. Using German administrative data we describe wage mobility since 1975 in West and since 1992 in East Germany. Wage mobility declined substantially in East Germany in the 1990s and moderately in East and West Germany since the late 1990s. These findings are robust in many dimensions. We apply RIF regression based decompositions to measure the role of factors associated with these mobility changes. Job and employment characteristics contribute to the decline in wage mobility, however, shifts in labor market structures are central for the development of overall wage mobility.