Do the Best Go West? An Analysis of the Self-Selection of Employed East-West Migrants in Germany

43 Pages Posted: 10 Feb 2004

See all articles by Herbert Brücker

Herbert Brücker

German Institute for Economic Research (DIW Berlin); IZA Institute of Labor Economics

Parvati Trübswetter

Government of the Federal Republic of Germany - Institute for Employment Research (IAB)

Date Written: January 2004

Abstract

Since the inequality of earnings in East Germany has approached West German levels in the late 1990s, the standard Roy model predicts that a positive selection bias of East-West migrants should disappear. Using a switching regression model and data from the IAB employment sample, we find however that employed East-West migrants remain positively self-selected with respect to unobserved abilities. This result is consistent with the predictions of our extended Roy model which considers moving costs that are negatively correlated with labour market abilities of individuals. Moreover, we find that wage differentials as well as differences in employment opportunities are the central forces which drive East-West migration after unification.

Keywords: migration, self-selection, East Germany

JEL Classification: R23, J61, P23

Suggested Citation

Brücker, Herbert and Trübswetter, Parvati, Do the Best Go West? An Analysis of the Self-Selection of Employed East-West Migrants in Germany (January 2004). Available at SSRN: https://ssrn.com/abstract=494142

Herbert Brücker (Contact Author)

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstraße 58
Berlin, 10117
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Parvati Trübswetter

Government of the Federal Republic of Germany - Institute for Employment Research (IAB) ( email )

Regensburger Str. 104
Nuremberg, 90478
Germany

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