Are the Supporters of Socialism the Losers of Capitalism? Conformism in East Germany and Transition Success

The empirical literature is inconclusive about whether a country's democratization goeshand in hand with a reallocation of economic resources. With newly available individual-leveldata of former residents of the socialist German Democratic Republic (GDR), we analyzehow supporters and opponents of the socialist system performed within the market-baseddemocracy of West Germany after reuni cation. Protesters, those who helped to overthrowthe socialist regime in the Peaceful Revolution show higher life satisfaction and better labormarket outcomes in the new economic system. Former members of the ruling socialist partyand employees in state-supervised sectors become substantially less satis ed. These resultsdo not seem to be driven by individual reactions to the transition, but rather by the removalof discriminatory practices in the GDR. Additional results indicate that conformism in theGDR also explains political preferences over the almost three decades after the reuni cationof Germany