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  5. The Separation and Reunification of Germany: Rethinking a Natural Experiment Interpretation of the Enduring Effects of Communism

Journal of Economic Perspectives

ISSN 0895-3309 (Print) | ISSN 1944-7965 (Online)

The Separation and Reunification of Germany: Rethinking a Natural Experiment Interpretation of the Enduring Effects of Communism

  • Sascha O. Becker
  • Lukas Mergele
  • Ludger Woessmann
Journal of Economic Perspectives
vol. 34, no. 2, Spring 2020
(pp. 143–71)
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Abstract

German separation in 1949 into a communist East and a capitalist West and their reunification in 1990 are commonly described as a natural experiment to study the enduring effects of communism. We show in three steps that the populations in East and West Germany were far from being randomly selected treatment and control groups. First, the later border is already visible in many socio-economic characteristics in pre-World War II data. Second, World War II and the subsequent occupying forces affected East and West differently. Third, a selective fifth of the population fled from East to West Germany before the building of the Wall in 1961. In light of our findings, we propose a more cautious interpretation of the extensive literature on the enduring effects of communist systems on economic outcomes, political preferences, cultural traits, and gender roles.

Citation

Becker, Sascha O., Lukas Mergele, and Ludger Woessmann. 2020. "The Separation and Reunification of Germany: Rethinking a Natural Experiment Interpretation of the Enduring Effects of Communism." Journal of Economic Perspectives, 34 (2): 143–71. DOI: 10.1257/jep.34.2.143

Additional Materials

JEL Classification

  • D72 Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
  • J16 Economics of Gender; Non-labor Discrimination
  • N34 Economic History: Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy: Europe: 1913-
  • N44 Economic History: Government, War, Law, International Relations, and Regulation: Europe: 1913-
  • P26 Socialist Systems and Transitional Economies: Political Economy; Property Rights
  • Z13 Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification
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