20 years of German unity - A comparison of establishments in the west and east of Germany during the crisis year of 2009 : Results from the IAB Establishment Panel 2009

Abstract

"Some 20 years after German reunification, living conditions and the economic base in East Germany are approaching that of West Germany in many areas. In view of this anniversary and against the backdrop of the global financial crisis that intensified in autumn 2008, this research report uses the data from the IAB-Betriebspanel (IAB-Establishment Panel) to analyse the German labour market from a perspective of firms/establishments in an east-west comparison. How can the status of the intra-German harmonisation process be evaluated? How has the global financial crisis affected the German economy?<br> The IAB-Betriebspanel (IAB Establishment Panel) shows that there are structural differences between East and West Germany which adversely impact East German productivity (e.g. relatively smaller industrial sector, fewer large establishments, less knowledge-intensive business services, lower export orientation, fewer employees in high-production operations).<br> Employment increased in East Germany from 2005 onwards for the first time since German reunification. During the crisis year of 2009, the level of total employment increased (remaining constant in West Germany) and employment subject to social insurance contributions stayed constant (falling in West Germany). East Germany's fewer links to export markets and its sector and establishment size class structures that have until now been rated unfavourably have clearly proven a competitive advantage in the economic slump of 2009.<br> Atypical employment such as part-time work, marginal employment or employment on fixed-term contracts and temporary agency work gained in importance in recent years. The increase in significance of employment on fixed-term contracts in particular is remarkable. The ratio of short-term employment contracts to the total number of employed has almost doubled since 1996. Establishments are justifying their use of this form of employment citing mainly short-term requirements and flexibility arguments such as extended probationary periods or uncertain economic development.<br> In the crisis year of 2009, there was much more short-time working than in the economically comparable year of 2003. This group included in particular large establishments and companies in the manufacturing industry. In 2009, pro rat four times as many employees were affected by short-time working than six years earlier. Short-time workers were rarely given training.<br> There are fewer establishments entitled to offer vocational training and actual training operations in East Germany than there are in the West. The training ratio (number of trainees in proportion to the number of employees), however, is almost identical in Germany's two regions, though in East Germany a considerable number is handled by off-site facilities. As a result, the chance of newly qualified trainees being offered employment is lower in East Germany than it is in the West. Conversely, East Germany has a higher advanced training ratio." (Authors' abstract, IAB-Doku) ((en))

Cite article

Bechmann, S., Dahms, V., Fischer, A., Frei, M. & Leber, U. (2010): 20 Jahre Deutsche Einheit - Ein Vergleich der west- und ostdeutschen Betriebslandschaft im Krisenjahr 2009. Ergebnisse des IAB-Betriebspanels 2009. (IAB-Forschungsbericht 06/2010), Nürnberg, 123 p.