Job Shift Patterns in the Former German Democratic Republic and the Federal Republic of Germany Convergence, System Contrast or Institutional Variation?

In this paper we study job shift patterns in the former German Democratic Republic (East Germany) and the Federal Republic of Germany (West Germany). Our research questions concern (a) cross-country similarities and differences in (firm-internal and firm-external) job mobility, (b) an explanation of job shift patterns by labor market composition, and (c) influences of human capital and labor market segmentation on specific rates of job mobility. The hypotheses we test are derived from three models describing job mobility under East German state-socialism and West German welfare-capitalism: a model of system convergence, system contrast, and institutional context. Our data are from the German Life History Studies of 1981/1982, 1988/1989, and 1991/1992. Event history analyses of the job career data document general similarity in the job shift patterns of East and West Germany, evidenced by equal overall levels of job shifting and a similar timing of job mobility in the working career. Yet, our analyses also indicate substantial cross-country differences: in East Germany chances of firm-external job mobility were much weaker than in West Germany, job moves were less negatively related to labor force experience, and gender, class and industry differences in favorable and unfavorable job moves were visibly weaker. These findings lend credit to predictions derived from the institutional context model. Non-technical summary In this paper, we study job shift patterns in the former German Democratic Republic (East Germany) and the Federal Republic of Germany (West Germany). Although there exist many studies into the labor market situation of persons in the new Bundesländer of Germany (the former GDR), less is known about the situation before reunification. Knowledge on job mobility is not purely of historical interest, but is still relevant as it could help to understand contemporary socio-economic problems and developments in the German labor market. In addition, comparison of these two countries offers a good opportunity to test whether socialism influences job mobility since after having shared a common history and culture, the Western and Eastern part of Germany quite suddenly (as of the end of World War II) began to live under distinct political systems. We address three research questions. Our first question is descriptive and addresses cross-country variation in (firm-internal and firm-external) job mobility. Our second question is explanatory and addresses the role of labor market composition for job shifting. The third research question addresses cross-country differences in the very mechanisms of job mobility, in particular the role of human capital and labor market segmentation. Against the background of two ideal-typologies of the East and West German labor markets (one stating ‘system convergence’ and another stating ‘system contrast’), we derive hypotheses on job mobility by addressing specific institutional differences among the countries. We uphold that due to the constitutional right of employment in the former GDR, East German workers may have been as mobile as West German workers. Yet, because of central economic planning, a state policy to reduce inter-firm mobility employers, the existence of firm-related social provision and the generally greater size of companies, East German workers are expected to have changed jobs less often between firms than West German workers. In addition, due to initial wage-discrimination of non-manual workers and more elaborate female-supportive employment policies, classand gender differentials in job mobility are expected to have been smaller in the former GDR. Data from the German Life History Studies of 1981/1982, 1988/1989, and 1991/1992 are used to test the expectations. The GLHS studies are retrospective surveys collecting data on career histories of East and West German men and women of selected birth-cohorts. Event history analyses of the job career data document general similarity in the job shift patterns of East and West German workers, evidenced by equal overall levels of job shifting and a similar timing of job mobility in the working career. Yet, our analyses also indicate substantial cross-country differences: (a) East German workers changed firms less often than West German workers, (b) job moves were less negatively related to labor force experience, and (c) gender, class and industry differences in favorable and unfavorable job moves were visibly weaker. Further analysis indicates that the lower between-firm mobility rate in the former GDR, appears to attributable to the on average larger size of firms. These findings lend credit to predictions derived from the institutional context model.