Scandinavian Working Papers in Economics

Working Paper Series,
Stockholm University, Swedish Institute for Social Research

No 1/2019: Does regime change affect intergenerational mobility? Evidence from German reunification

Michael Grätz
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Michael Grätz: Swedish Institute for Social Research, Stockholm University, Postal: SOFI, Stockholm University, SE-106 91 Stockholm, Sweden

Abstract: This study uses the natural experiment of German reunification and a difference-in-differences approach to test whether the political and economic transition in East Germany in 1990 affected intergenerational occupational and educational mobility. Applying data from the German Socio-Economic Panel Study (SOEP), I show that German reunification did neither strongly affect occupational nor educational mobility. These findings are robust to operationalizing social origin in various ways. Admittedly, reunification may have had small effects on occupational and educational mobility that cannot be uncovered with data currently available. However, my findings rule out that there were large effects of German reunification on intergenerational mobility. These findings are at odds with theories that argue that institutions strongly affect intergenerational mobility.

Keywords: intergenerational mobility; regime change; German reunification; difference-in-differences

54 pages, June 5, 2019

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