Minimum Wages and Employment: The Case of German Unification

Analysis in terms of the two-sector open economy shows that in bringing the market economy to East Germany, West Germany seems to have disregarded important fundamentals. Premature formation of a currency union led to a substantial real appreciation of the East German currency. Premature implementation of the West German system of wage bargaining resulted in inappropriate minimum wage schedules. Both measures made East German production possibilities and employment decline.

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Year of publication:	2001
Authors:	Heitger, Bernhard
Publisher:	Kiel : Kiel Institute of World Economics (IfW)
Subject:	Lohnniveau \| Mindestlohn \| Kleines-offenes-Land \| Handelbares Gut \| Nicht-handelbares Gut \| Lohnverhandlungen \| Beschäftigungseffekt \| Schätzung \| Neue Bundesländer \| Minimum Wages \| Employment \| German Unification

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Series:	Kiel Working Paper ; 1045
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	859680533 [GVK] hdl:10419/17724 [Handle] RePEc:zbw:ifwkwp:1045 [RePEc]
Classification:	P23 - Factor and Product Markets; Industry Studies; Population ; E24 - Employment; Unemployment; Wages
Source:	EconStor

Persistent link: https://www.econbiz.de/10010260462