Facts on the development of the qualification-related and sectoral wage structure

Abstract

"The paper examines the influence of schooling and work experience on the development of wage inequality in the 1990s. On the basis of the employment and benefit recipients historical data file as well as the IAB employment sample, Mincer-type earnings functions are estimated as Tobit and quantile regressions for western and eastern Germany. An increase in premium payments for educational and vocational qualifications becomes especially obvious for employees with the upper secondary school examination (Abitur) and with vocational training as well as for graduates of higher education. In the new Länder, the premium payments have developed similarly to those in the old Länder, though at a lower level. Especially for employees with higher education or university degrees, the differences between the old and new Länder have decreased over time. In western and eastern Germany, the wages have increased particularly in those sectors that already paid high wages in the beginning. An equalization process between the old and new Länder can also be observed for the sectoral wage structure. There were relatively high increases in wages in some branches of the economy in eastern Germany. This is particularly the case for sectors in which western German and foreign enterprises carried out big investment projects in eastern Germany in the 1990s. The findings of the quantile regressions give a more mixed picture, that is, the development of premium payments for work experience and qualifications differ to a relatively high degree between the individual quantiles. There was no evidence of an excess supply of highly qualified people who displace lower qualified workers and accept lower premium payments for their education. The observed change in qualification-related and sectoral wage structures is all in all in accordance with the hypothesis of 'skill-biased technological and organizational change' and also confirms research from other countries." (Author's abstract, IAB-Doku) ((en))

Cite article

Bellmann, L. & Gartner, H. (2003): Fakten zur Entwicklung der qualifikatorischen und sektoralen Lohnstruktur. In: Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Vol. 36, No. 4, p. 493-508.