Explain participation of women in unification of germany
Answers
Answer:
from a social guide
Explanation:
A peculiarity of the former German Democratic Republic, like of several of her former
Eastern-European partner states, was the high involvement of women in the labor force.
Before the collapse of the communist system, more than 80% of women at working age
participated in the labor market – a rate only comparable to the achievement of Scandinavian
countries like Denmark and Sweden. In particular, it appears that women in the German
Democratic Republic were better integrated into the labor market than women of the former
German Federal Republic where participation rates were low by international standards. After
the unification of the two German states, the share of women resident in the area of the former
German Democratic Republic (henceforth referred to as East Germany) who participated in
the labor market declined, but only gradually. In May 2000, 72% of all women at working age
in East Germany were employed or, if not, in search of employment. Although at that time the
female participation rate in East Germany was considerably low compared to the one before
unification, it still exceeded the corresponding rate of 62% for women resident in the area of
the former German Federal Republic (henceforth referred to as West Germany) substantially.
The moderate decline in female labor force participation in East Germany is quite remarkable
considering that women have been facing high levels of unemployment since the collapse of
employment opportunities at the outset of unification. The economic transition following
thereafter brought the employment rate among working age women to the West German level
of 58%. One might expect that enduring low outflow from unemployment to employment
would discourage unemployed women from seeking employment. Besides, public policies
during the economic transition, like early retirement schemes and the adaptation of the Western tax and transfer system, established incentives to withdraw from the labor market.
On the other hand, the central planners of the former East German command economy, in
response to capital shortages, promoted female emancipation in the labor market. It is possible
that this policy affected attitudes toward participation in the labor market fundamentally. If
this is true, the question arises if East German women will adapt their behavior to West
German patterns. For by definition unemployment is the difference between labor force
participation and employment, an answer to this question might help to better understand the
nature of the unemployment problem in East Germany.
2
So far, most analysts of the Eastern European labor markets in transition, like Svejnar (1999)
in a prominent survey, have largely ignored the role of labor force participation and labor
supply.1
The aim of this paper is to address this gap, and to study empirically the adjustment
of labor force participation behavior formed in a centrally planned economy and exposed to a
free market economy. Reunited Germany provides a unique opportunity for this analysis, as it
allows comparing the participation decisions of East German women to those of West
German women who have been living with the same economic institutions.
For our analysis on the individual level, we will use regional samples of prime age non-single
women, extracted from the 1990-1999 waves of the German Socio-Economic Panel. In view
of the fact that shortage of job opportunities has played an important role during economic
transition, we develop an empirical model that explains the incidence of employment as the
result of (1) the individual choice to participate in the labor market and (2) the employment
opportunities of those individuals who decide to participate. Estimation of this model lets us
isolate the impact of differences in individual preferences, and of differences in individual and
family characteristics, on the differences in participation levels.
On the basis of our empirical analysis we find that differences in preferences on participation
largely explain the participation gap at the time of the unification. But afterward this factor
has gradually become less important, which indicates that prime age East German women are
indeed adjusting to the preference patterns of West German women. It turns out that, on the
aggregate level, this process is partly offset by the individual characteristics of East German
women, which have changed in a way favorable to participation.
The remainder of the paper is organized as follows:
unification on the East German labor market and describes the development of female labor
force participation since unification on the aggregate level. Section 3 formulates our empirical
model to jointly analyze employment and labor force participation on the individual level.