Following monetary union with West Germany in 1990, the real wage of East German workers rose 83%. I use the German Socio-Economic Panel data to investigate the determinants of wage growth, and assess whether they are consistent with efficient restructuring. Although job-changing rates were initially high, the share of wage growth that accrued to movers was little higher than in the west, suggesting that the incentives to move were too low. For 1990 to 1991, the biggest gainers were low-wage workers generally, and women and the less-educated specifically. For 1991 to 1996, the biggest gainers were women and the better-educated.

This paper examines the mobility of individuals through the wage and earnings distributions, using 1979-1991 data from the National Longitudinal Survey of Youth. Lifetime wages will be more equally distributed than wages from any single year if individuals change position in the wage distribution over time. The results suggest that mobility is predominantly within group mobility, reducing wage inequality by 12%-26% over a four-year horizon. A detailed examination of within-group mobility, using year-to-year estimates of transition probabilities among quintiles of the distribution, reveals similar general patterns across all skill groups: mobility declined significantly over the years, especially at the lower end of the wage and earnings distributions.