German Reunification: Welfare Gains and Losses East and West

A framework of welfare accounts (Juster and Stafford, 1985; Headey, 1993; see also Goodin et al., 1999) is used to assess gains and losses to East and West Germans in the post-reunification period, 1990–1997. The welfare accounts have three segments: a capital/stocks account, an income/flows account and a subjective welfare/psychic income account. This framework differs from conventional welfare economic accounts in explicitly defining and measuring welfare in psychological terms ... as perceived utility/satisfaction. It has recently been argued that this approach is required, if one accepts that individual utilities are not exogenous but are affected by changing comparisons with others (Duesenberry, 1949; Easterlin, 1974, 1995; Hollaender, 2001). Our hypotheses are that in the post-reunification period West German welfare was sacrificed – in all three segments of the accounts – in order to permit resources to flow to East Germans and to boost their stocks, flows and utilities. The hypotheses are supported in the case of West Germans, but results are mixed for East Germans. Our data source is the German Socio-Economic Panel (GSOEP) which began in 1984 in West Germany and has involved reinterviewing a very large representative national sample every year since. The panel was extended to East Germany in June 1990, before formal reunification occurred, and so provides a picture of stocks, flows and utilities before the effects of integration into the Federal Republic were felt.     

Political legitimacy versus economic imperatives in system transformation: Hungary and East Germany 1990–93

East European policy makers currently face critical trade-offs between economic imperatives and system legitimacy imperatives. Economic imperatives, derived from the goal of medium term prosperity, demand rapid privatization and marketization. System legitimacy imperatives demand measures to minimize the unemployment, wage cuts and income inequality resulting in the short term from privatization and marketization. In 1989–90 East Germany and Hungary appeared to face the least harsh trade-offs and to be best placed of the ex-communist countries to achieve successful system transformation. Unlike their East European neighbours, neither had to develop democratic and market institutions from scratch. East Germany would import the Federal Republic's political system and market institutions. Hungary already had organized political parties and had been developing market institutions since 1968. Using panel survey data, the paper shows that, despite considerable economic achievements since 1990, there is widespread personal dissatisfaction and distress, and the legitimacy of democratic and market institutions is weak. The main data sources are the Hungarian Socio-Economic Panel (1992–5777 individuals in 2888 households) and the East German segment of the German Socio-Economic Panel (1990–4453 individuals in 2179 households).     

The Set Point Theory of Well-Being Has Serious Flaws: On the Eve of a Scientific Revolution?

Set-point theory is the main research paradigm in the field of subjective well-being (SWB). It has been extended and refined for 30 years to take in new results. The central plank of the theory is that adult set-points do not change, except temporarily in the face of major life events. There was always some ‘discordant data’, including evidence that some events are so tragic (e.g. the death of one’s child) that people never regain their set-point. It was possible to dismiss these events as ‘exceptions’ and maintain the theory. However, several new findings are emerging, which cannot be dismissed as ‘exceptions’ and which appear to require substantial revisions or replacement of set-point theory. Many of these findings are based on the German Socio-Economic Panel Survey (SOEP 1984-), which provides the longest available time series on life satisfaction. Despite its centrality, the concept of the set-point is often not precisely defined. In this paper three alternative working definitions are offered. Depending on which definition is used, it is found that over 20 years 14–30% of German panel members recorded large and apparently permanent changes in their set-points. Changes of this magnitude are not compatible with set-point theory as currently understood. The challenge for SWB researchers now is to develop a theory which can account for change as well as stability.     

The erosion of union membership in Germany: determinants, densities, decompositions

Unionization in Germany has declined considerably during the last two decades. We estimate the impact of socioeconomic and workplace-related variables on union membership by means of Chamberlain-Mundlak correlated random effects probit models, using data from the German Socio-Economic Panel. Drawing on the estimates, we project net union densities (NUD) and analyze the differences between East and West Germany, as well as the corresponding changes in NUD over time. Nonlinear Blinder-Oaxaca-type decompositions show that changes in the composition of the work force have only played a minor role for the deunionization trends in West and East Germany. In West-East comparison, differences in the characteristics of the work force reflect a lower quality of membership matches in East Germany right after German unification.     

The western fertility decline: Reflections from a chronological perspective

The study of recent fertility trends in the West has been dominated by examinations of Europe. A better perspective on twentieth-century fertility movements can be gained by giving an equal emphasis to trends in the ‘Offshoots’ (USA, Canada, Australia and New Zealand). This paper focuses on the periods of rapid fertility decline and to a greater extent on the intervening periods of near-equilibrium. It is suggested that the ‘late twentieth century compromise’ is more stable than is suggested by reports on its internal strains, and that only massive government intervention could raise fertility.     

Valuing Time: A Conference Overview

The article provides an overview of the development of the field of time use studies. It provides an intellectual history charting the various interests that have shaped the growing applications of this broad social indicator. Recent applications, reflected in this special issue, are (a) interpreting the meaning of leisure, time; (b) the social and environmental consequences of affluence; and (c) non-market work, parenting and balance between work and family. New approaches to trends in average leisure time have attempted to interpret the impact of social and technological change on the meaning of leisure. These approaches suggest that the ‘economic emergence of women’ rather than the ‘IT revolution’ has been the more influential trend and that being ‘busy’ may have replaced conspicuous idleness as the signifier of social status. These new forms of social organization in advanced societies have also attracted a great deal of research on children’s use of time, parenting and work-family balance. An important new application for time-use information has been in the study of ‘diseases of affluence’, the health consequences of increasing sedentary activities, and over-eating, the environmental consequences of consumerism, all of which leads to the need to reassess the economic significance of activities that occur beyond the market. A special feature of this article is an extensive review of approaches to valuation (in dollars and cents) of the outputs of unpaid (non-market) work. The article provides a framework for what activities it makes sense to value and the current ideas about ‘best practice’ methods of valuation.     

The German East-West Mortality Difference: Two Crossovers Driven by Smoking

Before the fall of the Berlin Wall, mortality was considerably higher in the former East Germany than in West Germany. The gap narrowed rapidly after German reunification. The convergence was particularly strong for women, to the point that Eastern women aged 50–69 now have lower mortality despite lower incomes and worse overall living conditions. Prior research has shown that lower smoking rates among East German female cohorts born in the 1940s and 1950s were a major contributor to this crossover. However, after 1990, smoking behavior changed dramatically, with higher smoking intensity observed among women in the eastern part of Germany. We forecast the impact of this changing smoking behavior on East-West mortality differences and find that the higher smoking rates among younger East German cohorts will reverse their contemporary mortality advantage. Mortality forecasting methods that do not account for smoking would, perhaps misleadingly, forecast a growing mortality advantage for East German women. Experience from other countries shows that smoking can be effectively reduced by strict anti-smoking policies. Instead, East Germany is becoming an example warning of the consequences of weakening anti-smoking policies and changing behavioral norms.     

Labor Migration,Remittances and Economic Well-being of Households in the Philippines

Labor Migration has long been viewed as a strategy adopted by the household unit to allocate family resources rationally to increase the flows of income and to raise family standard of living. The research reported here examines the extent to which remittances sent by Filipino overseas workers increase the income and standard of living of households in the Philippines. Data for the analysis were obtained from a representative sample of 2,388 households drawn in 1999–2000 from four major “labor sending” areas in the Philippines. The analysis compares households with and without overseas workers to estimate the contribution of remittances to household income and to household standard of living (measured once by an ‘objective’ indicator and once by a ‘subjective’ assessment). The data reveal that due to remittances the income of households with overseas labor migrants is considerably higher than the income of households without overseas workers. The data also reveal that remittances are used mostly for consumption purposes (e.g. purchase of food, clothing, education, and goods) and that most of the difference in standard of living (whether measured on the ‘objective’ or the ‘subjective’ scale) between households with and without overseas workers are attributed to remittances. The implications of labor migration and the policy that encourages and supports labor migration for the Filipino society are evaluated and discussed.

Has East Germany Overtaken West Germany? Recent Trends in Order‐Specific Fertility

Some 20 years after reunification, the contrast between East and West Germany offers a natural experiment for studying the degree of persistence of Communist-era family patterns, the effects of economic change, and fertility postponement. After reunification, period fertility rates plummeted in the former East Germany to record low levels. Since the mid-1990s, however, period fertility rates have been rising in East Germany, in contrast to the nearly constant rates seen in the West. By 2008, the TFR of East Germany had overtaken that of the West. We explore why fertility in East Germany is higher than in West Germany, despite unfavorable economic circumstances in the East. We address this and related questions by (a) presenting an account of the persisting East/West differences in attitudes toward and constraints on childbearing, (b) conducting an order-specific fertility analysis of recent fertility trends, and (c) projecting completed fertility for the recent East and west German cohorts. In addition to using the Human Fertility Database, perinatal statistics allow us to calculate a tempo-corrected TFR for East and West Germany.     

The Influence of Simulated Home and Neighbourhood Densification on Perceived Liveability

This study experimentally manipulated neighbourhood density and home location to reveal the effect of these changes on perceived liveability. Two hypothetical scenarios were provided to 106 households using a Computer-Aided Personal Interview (CAPI). The first scenario examined a densification of the participant’s current property, and the second scenario examined a change to the location of the participant’s home. Current home location, key destinations and alternative locations were recorded using an integrated Geographic Information System (GIS) interface. The findings show that people do optimise their location based on factors such as accessibility and transport distances to key locations. When given the choice to relocate to a range of different neighbourhoods, people trade closer travel distances in order to maintain a friendly, safe, clean neighbourhood environment. Home-owners are loss-averse when it comes to densification, but older home owners and those with larger homes have relatively fewer barriers to land area reduction.     

Visual Capacity,Out-of-home Activities and Emotional Well-being in Old Age: Basic Relations and Contextual Variation

This work examined the role of visual capacity in connection with psychological, social network related, and socio-structural predictors of out-of-home everyday functioning and emotional well-being. The results are based on a sample of 1519 community dwelling elderly (55–98 years; mean age 70.8 years), 757 of them were living in urban, and 762 were living in rural regions, half-and-half from East and West Germany. Structural equation modeling supported the hypothesis of robust relations among age, vision, intellectual functioning, out-of-home everyday functioning, and emotional well-being that are largely independent of the regional and societal macro context. In detail, vision mediated the effect of age on out-of-home activities of daily living (ADL/IADL) and leisure activities, while intellectual functioning mediated the effect of vision on out-of-home leisure activities. All effects on emotional well-being were mediated by out-of-home leisure activities. Enriching the micro level model with psycho-social variables (i.e., outdoor motivation and social resources) and an indication of the socio-economic situation (i.e., financial resources) revealed some contextual variations: At this meso level of analysis, social resources contributed less and outdoor motivation contributed more to out-of-home leisure activities in the urban than in the rural sample. Second, outdoor motivation was significantly related to social resources in the urban, but not in the rural sample. Third, financial resources contributed modestly but significantly to out-of-home leisure activities in the East German, but not in the West German urban and rural samples. It is concluded that visual capacity plays a substantial role in a robust micro level model able to predict everyday functioning and well-being. If additional resources adding to the prediction of these outcomes are also taken into consideration in a meso level analysis model, the whole variable interplay becomes more strongly affected by macro contextual variation.     

Horizontal and Vertical Inequality: Some Interconnections and Indicators

This note is concerned with presenting some simple indices of group-wise relative disadvantage in the distribution of income, in terms of the distance between the group’s share in total population and its share in total income. The group-wise indices are then aggregated into society-wide indices of inter-group disparity. Empirical illustrations of the note’s measurement concerns are provided, using data on the global distribution of income. The measures of horizontal inequality are shown to lead to corresponding measures of vertical inequality, in the special case in which the grouping resorted to is ‘individualistic’.     

Culture and Wellbeing: The Case of Indigenous Australians

A recurring theme in Indigenous affairs in Australia is a tension between maintenance of Indigenous culture and achievement of socio-economic ‘equity’: essentially ‘self-determination’ versus ‘assimilation’. Implicit in this tension is the view that attachment to traditional cultures and lifestyles is a hindrance to achieving ‘mainstream’ economic goals. Using data from the National Aboriginal and Torres Strait Islander Social Survey, stronger attachment to traditional culture is found to be associated with enhanced outcomes across a range of socio-economic indicators. This suggests Indigenous culture should be viewed a part of the solution to Indigenous disadvantage in Australia, and not as part of the problem.     

Motherhood,labor force behavior,and women’s careers: An empirical assessment of the wage penalty for motherhood in britain,germany, and the united states

Using harmonized longitudinal data from the British Household Panel Survey (BHPS), the German Socio-Economic Panel (GSOEP), and the National Longitudinal Survey of Youth (NLSY), we trace career prospects after motherhood for five cohorts of American, British, and West German women around the 1960s. We establish wage penalties for motherhood between 9% and 18% per child, with wage losses among American and British mothers being lower than those experienced by mothers in Germany. Labor market mechanisms generating the observed wage penalty for motherhood differ markedly across countries, however. For British and American women, work interruptions and subsequent mobility into mother-friendly jobs fully account for mothers’ wage losses. In contrast, respective penalties are considerably smaller in Germany, yet we observe a substantial residual wage penalty that is unaccounted for by mothers’ observable labor market behavior. We interpret this finding as indicating a comparatively more pronounced role for statistical discrimination against mothers in the German labor market.     

Are Educational Mismatches Responsible for the ‘Inequality Increasing Effect’ of Education?

This paper asks whether educational mismatches can account for the positive association between education and wage inequality found in the data. We use two different data sources, the European Community Household Panel and the Portuguese Labour Force Survey, and consider several types of mismatch, including overqualification, underqualification and skills mismatch. We test our hypothesis using two different measurement methods, the ‘statistical’ and the ‘subjective’ approach. The results are robust to the different choices and unambiguously show that the positive effect of education on wage inequality is not due to the prevalence of educational mismatches in the labour market.     

Measures of Disadvantage: is Car Ownership a Good Indicator?

A need to better understand the multidimensional nature of disadvantage is leading to the adoption of a wider range of measurement variables. One variable now commonly adopted is zero car ownership. This paper challenges the logic of including ‘not having a car’ as an indicator of disadvantage. It argues that this can distort the real picture of disadvantage. It presents evidence to show that zero car ownership can be a positive feature of low income households and that conversely high car ownership can put significant financial stress on households with low income.     

Social Trust,Social Partner Time and Television Time

Social trust is an important phenomenon, but the influence of important time-based measures upon trust has not been examined. Such measures include social contact and anti-social activity, such as television watching, which allows for the co-presence of other people. This paper reports on associations between trust and weighted means of co-present ‘social’ time (defined as time spent in various ‘social’ activities) and co-present time spent watching television, using the Australian Time Use Survey, 2006. It finds that trust is associated with social time spent in the co-presence of ‘strangers’ predominately from outside the household, and that TV watching in the co-presence of ‘familiars’—friends and family—is negatively associated with trust.     

Personal Wellbeing Index in a National Cohort of 87,134 Thai Adults

Satisfaction with life correlates with other measures of subjective wellbeing and correlates predictably with individual characteristics and overall health. Social indicators and subjective wellbeing measures are necessary to evaluate a society and can be used to produce national indicators of happiness. This study therefore aims to help close the gap in wellbeing data for Thailand. The specific aims are to: (1) calculate the Thai PWI and domain scores using a large scale sample; (2) examine the level of life satisfaction of Thais when compared to international standards; (3) examine the Thai PWI and domains in relation to demographic, socioeconomic, and geographic characteristics. Our report derives from the findings on the Personal Wellbeing Index (PWI) in a large national cohort of Sukhothai Thammathirat Open University adult students living all over Thailand (n = 87,134). This Thai cohort had an overall PWI of 70.0 on a scale from 0 to 100 which is consistent with Western populations. The ‘spirituality and religion’ domain had the highest average score. ‘Standard of living’, ‘future security’ and ‘achievement in life’ made the largest contribution to overall ‘satisfaction in life as a whole’. These domains also show a positive trend with increasing age, being married, higher income, more education, more household assets, and rural residence. The PWI will be an important tool for policymakers to understand the subjective wellbeing of population groups especially as Thailand is undergoing a political and economic transition.     

The Differentiation of Social Demands in Europe. The Social Basis of the European Models of Capitalism

This paper tests the impact of various determinants of the preference for two key elements of the European social models: redistribution and trade unions, using individual data from the first round of the European Social Survey. The basic hypothesis is that the main determinant of an individual’s support for these elements of the European models is the social position of the individual in terms of income, status and risks attached to their labour market insertion. The paper also considers the relative importance of less ‘materialist’ influences such as religion or other cultural determinants. The estimations show that ‘materialist’ determinants are by far the most important influences on individual preferences, contrary to what most social theories of modernisation contend.

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Agency,Values, and Well-Being: A Human Development Model

This paper argues that feelings of agency are linked to human well-being through a sequence of adaptive mechanisms that promote human development, once existential conditions become permissive. In the first part, we elaborate on the evolutionary logic of this model and outline why an evolutionary perspective is helpful to understand changes in values that give feelings of agency greater weight in shaping human well-being. In the second part, we test the key links in this model with data from the World Values Surveys using ecological regressions and multi-level models, covering some 80 societies worldwide. Empirically, we demonstrate evidence for the following sequence: (1) in response to widening opportunities of life, people place stronger emphasis on emancipative values, (2) in response to a stronger emphasis on emancipative values, feelings of agency gain greater weight in shaping people’s life satisfaction, (3) in response to a greater impact of agency feelings on life satisfaction, the level of life satisfaction itself rises. Further analyses show that this model is culturally universal because taking into account the strength of a society’s western tradition does not render insignificant these adaptive linkages. Precisely because of its universality, this is indeed a ‘human’ development model in a most general sense.