Comparing Paths of Transition
Comparing Paths of Transition
Employment Opportunities and Earnings In East Germany and Poland During the First Ten Years of the Transformation Process
This chapter compares East Germany and Poland for three purposes: to document how exceptional the East German rules of transformation were in comparison to other countries in East Central Europe; to show whether these exceptional rules led to exceptional results; and to pinpoint the specific successes and failures of the East German case. The development of earnings is at the heart of how countries move away from state-controlled redistribution toward market-type exchange, because the remuneration rules address questions of market autonomy, the bargaining power of old and new interest groups, and labor market institutions generating different patterns of social inequalities. There are some striking commonalities between the two cases despite diverging institutional preconditions and strategies of transition. In both East Germany and Poland, education and training emerge as predominant determinants of individual earnings.
Keywords: East Germany, Poland, East Central Europe, market-type exchange
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