Determinants of East-West-migration in Germany: A macroeconometric analysis

A main feature characterising the transition process of eastern Germany is the scope with which East-West migration took place before, during, and after the German reunification. Overall, 4 million individuals left East Germany to migrate to the west between 1989 and 2007 (gross migration). Taking into account West-East migration, cumulative net migration amounted to 1.7 million persons. This relates to a share of 10.3 % of the original East German population at the beginning of 1989. These figures highlight the relevance of the migration phenomenon in the East-West German context and underline that it is highly indicated to examine it and the resulting effects more closely. They also raise questions about the reasons and the determinants of this migration movement. This paper explicitly analyses the determinants of East-West migration in Germany using a macroeconometric panel data model and applying pair-wise gross migration flows and rates between the respective eastern and western German federal states for the period 1991 – 2007. In order to provide a thorough sensitivity analysis, the basic empirical migration model is not only estimated in a variety of different specifications and using different estimation methods for the full sample period. In addition, the model is also estimated for three different subsamples. Investigating both absolute gross migration and gross migration rates East-West the results of the conducted estimations can be summarised as follows. The regional income difference as well as separately integrated income variables for both regions can be identified as highly significant explanatory variables explaining the gross migration flows and rates from the eastern to the western part. Regional differentials in the employment and labour market situation approximated by the respective differences in labour market size, the intensity of labour demand as well as unemployment between both German parts, also act as important explanatory factors. Furthermore, a pro-cyclical dependency of migration can be confirmed in all estimated model specifications and almost all estimated subsamples. Theory predicts a positive relationship between the level of qualification of individuals and the subsequent migration. This, too, can be indirectly confirmed with the analysed panel data set. Whereas increasing rents in the east act as a push-factor to East-West German migration, rising regional infrastructural differences seem to draw people towards the west. Distance as an approximation for migration costs shows the expected negative sign in all model specifications and estimated subsamples.