THE EASTERN GERMAN LABOR-MARKET IN TRANSITION - GROSS FLOW ESTIMATES FROM PANEL-DATA

This paper investigates the behavior of the eastern German labor marke t during the initial stages of the transition to a market economy, usi ng information contained in a unique longitudinal survey of eastern Ge rman residents taken between November 1990 and November 1991. The stud y utilizes Markovian flow analysis of worker transitions between labor market states. Steady-state predictions confirm that the labor market will undergo substantial contraction before stabilizing and that job creation will be dominated by the emerging service sector, Multinomial logistic estimates suggest that standard methodologies can have a use ful role in the analysis of labor markets in transition. (C) 1995 Acad emic Press, Inc.