Comparison of women's situation in the labour market in the former GDR and Poland
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Witkowska, Dorota Article Comparison of women's situation in the labour market in the former GDR and Poland Comparative Economic Research. Central and Eastern Europe Provided in Cooperation with: Institute of Economics, University of Łódź Suggested Citation: Witkowska, Dorota (2016) : Comparison of women's situation in the labour market in the former GDR and Poland, Comparative Economic Research. Central and Eastern Europe, ISSN 2082-6737, De Gruyter, Warsaw, Vol. 19, Iss. 2, pp. 129-148, https://doi.org/10.1515/cer-2016-0017 This Version is available at: https://hdl.handle.net/10419/184394 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may be saved and copied for your personal and scholarly purposes. You are not to copy documents for public or commercial purposes, to exhibit the documents publicly, to make them publicly available on the internet, or to distribute or otherwise use the documents in public. If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by-nc-nd/3.0
Comparative Economic Research, Vol ume 19, Number 2, 2016 10.1515/cer-2016-0017 DOROTA WITKOWSKA ∗ Comparison Of Women’s Situation In The Labour Market In The Former GDR And Poland Abstract Twenty-five years have passed since the fall of the Berlin Wall and the beginning of transition in the former socialist countries. The aim of this research is to find out how women in East Germany and Poland, which followed completely different transformation patterns, have been affected by the introduction of market reforms. As a result of the investigation we found that the situation of women in both countries has been changed after the collapse of the communist system in Europe. However, women in former German Democratic Republic, following a significant decrease in their participation in the labour market in the early transition period, went on to become even more active than their counterparts in the Western lands. At the same time, in Poland the economic activity rate of women is lower than was observed before the transformation. Keywords: labour market, economy in transition, gender inequalities 1. Introduction In the beginning of nineties of the twentieth century, when the postcommunist countries in Central and Eastern Europe began their transformations towards a market economy, there was no pre-existing theory of transition. ∗ Ph.D., Full Professor at the University of Lodz, Faculty of Management, e-mail: [email protected]
130 Dorota Witkowska Therefore from the very beginning the transformation from centrally planned to market economies has been accompanied by a number of controversies (Roland 2001), including: • the speed of reforms, • privatization methods, • the role and organization of government, • the type of financial system needed, etc. These controversies have been mainly connected with the ignorance and unpreparedness of economists and politicians with respect to the large-scale institutional changes inherent in such a transition. It is worth mentioning that these changes have influenced not only the domestic conditions in the transformed states, but also the international situation; it is enough here to mention the breakup of Yugoslavia, Czechoslovakia and the Soviet Union. The transition from centrally planned to market-oriented economies has attracted much attention from economists since the beginning of the 1990s. Hence one can find discussions of many problems in the literature, starting from the “general view” of transformation through opinions concerning the problems and the goals that should be achieved on to many detailed aspects of transition. In general two types of transformation of the economic system have been distinguished (see (Svejnar 2002) and (Roland 2001)): • Type I – rapid reforms in a “big bang” style, also called “Washington Consensus”; • Type II – gradual reforms, also labeled as the “evolutionary – institutionalist” perspective. Type I was dominant at the beginning of the transformation of Central and Eastern Europe. These reforms proved relatively sustainable and were associated with improving economic performance in Central Europe (except the Czech Republic) and in the Baltic states. However they were much less successful in Russia and other countries of the Commonwealth of Independent States (CIS) and the Balkans. Type II has had more support in the academic environment than in international policy circles. It was a minority approach at the beginning of the economic and political transformation, but it gained more support over time. The implementation of evolutionary reforms required that governments have enough resources to enforce market-friendly laws and avoid being captured or dominated by special interests. While it is difficult to capture the full range of differences across transition states implementing Type II reforms, it is possible to point out the differences in several specific areas: privatization, banking reform, labour allocation, the legal system, etc. (see (Svejnar 2002), (Boeri and Terrel 2002)).
Comparison of Womenʼs Situation… 131 Roland (2001) argues that such classification of the changes that were introduced in transition countries mainly emphasizes the speed of reforms, and that there are many other dimensions that should be taken into account. He also identifies several “unexpected surprises” that were brought about by transition, among them an economic decline in all countries in the former socialist bloc, and the appearance and extension of the “Mafia phenomenon”. On the other hand Boeri and Terrel (2002) emphasize the situation on the labour markets and distinguish two key patterns of the reallocation of labour. The first could be observed in the group of former Soviet Union republics, where there was relatively little decline in employment, a marked decrease in labour productivity and real wages, a large turnover of the unemployment pools, and a relatively small reallocation of jobs between “old” and “new” sectors. The second pattern was characteristic for the majority of Central and Eastern European (CEE) states, with lower declines in labour productivity. In these countries the economic recovery started earlier than in Russia and the other countries which joined the Commonwealth of Independent States. However, along with a fairly rapid degree of structural change, the CEE countries experienced stagnant unemployment (see (Rutkowski 2003), who provides a detailed discussion of the case of Lithuania). There are two exceptions from the above-described patterns: The Czech Republic, which experienced a long period of low unemployment, and Estonia, which displayed a significant labour reallocation from the beginning of transformation process. The former German Democratic Republic (GDR) constitutes a special case and is usually not considered in such analyses because its path toward a market economy was unique among the post-communist states. GDR simply joined the Federal Republic of Germany, an event which is known in the literature as German reunification, officially dated on October, 3, 1990. German reunification contributed to essential and immediate changes in the economic, social and political situation of the former GDR. For instance, the reconstruction of the East Germany economy and infrastructure, the new currency, the adoption of new regulations, etc. were financed by the western lands (the so-called ‘Solidarity Surcharge’) and by German capital. 1 The new United Germany retained all West Germany’s memberships in international organizations (including the European Community and NATO), while relinquishing all GDR memberships (for instance in the Warsaw Pact). 1 The estimated cost of reunification is two trillion euros during the twenty years, a figure given by Peer Steinbruck, the former German Finance Minister. (Interview… 2011).
132 Dorota Witkowska The aim of the research described in this paper 2 is to determine generally how the transition process affected the labour market; and in particular how women in formerly socialist countries have been affected by the introduction of market reforms. In our investigation we focus on gender disparities and problems related to the changes of socio-economic situation in two former Soviet bloc states i.e. East Germany and Poland, which followed completely different transformation patterns. 2. The demographic situation In discussing situation in Poland and Germany we should note that both states face similar demographic problems (see Tables 1–2), which include: • A low fertility rate, which has been decreasing and has been below the replacement fertility rate (being about 2.1 in industrialized countries); and • Population ageing. According to a report by the Hamburg Institute of International Economics, a labour market shortage might damage, or at least hamper, the German economy because the German birth rate has fallen to the lowest in the world (8.2 children born per thousand inhabitants over past five years). In such a situation women’s participation in labour market could become one of the main factors influencing the country’s economic future. 3 Comparing observations from the years 1985-2010 (in five-year periods), it is visible that the demographic structure did not essentially change, however in 2010 the population in Germany rose by 5%, while in Poland it increased by 2% in comparison to the year 1985. At the same time, in the Eastern part of Germany (with Berlin in 1990; divided between East and West Berlin) it decreased by 2%. The estimated fertility rate for 2014 is 1.43 for Germany and 1.33 for Poland. 4 2 The research was conducted within the framework of a DAAD grant: Changes of women’s situation in the labor market in European post-communist states. The examples of former East Germany and Poland and the NCN grant No. 2015/17/B/HS4/00930: Changes of women’s position in the labour market. Analysis of the situation in Poland and in the selected European Union States in the years 2002–2014. 3 See Germany replaces… 2015. 4 See https://www.cia.gov/library/publications/the-world-factbook/rankorder/2127rank.html.
Comparison of Womenʼs Situation… 133 Table1. Demographic structure Year Population by sex Fertility rate Overall total in thousands Female as a % of the overall total Germany East Germany Poland East Germany Poland Germany Poland 1985 78896.4 16640 37340.5 52.66 51.23 1.46 2.33 1990 80487.2 18262 38073.0 52.28 51.27 1.43 1.99 1995 83147.7 17646 38284.0 51.53 51.34 1.30 1.55 2000 83512.5 17232 38254.0 51.19 51.54 1.35 1.37 2005 83826.0 16740 38157.0 50.95 51.64 1.35 1.24 2010 83017.4 16326 38200.0 50.82 51.72 1.36 1.38 Rates 5 1.05 0.98 1.02 Source: Own elaboration on the basis of data from: Polish and German Central Statistical Offices worldometers.info. Data for the year 1985 – Statistisches Jahrbuch der Deutschen Demokratischen Republik, Zeitschriftenband 1987, 1988. Table 2. Life Expectancy Yea Year r Life expectancy at birth Expectation of life at birth (in years) Female Male Germany East Germany Poland Germany East Germany Poland 1985 na. 75.5 74.8 na. 69.6 66.5 1990 na. 76.2 75.5 na. 69.2 66.5 1995 na. 78.6 76.4 na. 71.3 67.6 2000 81.4* 80.8 78.0 75.6* 73.8 69.7 2005 82.2 81.9 79.4 76.7 75.6 70.8 2010 83.0 82.6 80.6 78.0 76.8 72.1 2012 83.3 na. 81.1 78.5 na. 72.7 Rates 2010:1985 1.09 1.08 1.10 1.08 * Data from 2001 Source: Own elaboration on the basis of data from: Polish and German Central Statistical Office worldometers.info. Data for the year 1985 Statistisches Jahrbuch der Deutschen Demokratischen Republik, Zeitschriftenband 1987, 1988. Length of life depends on the living conditions, which were better in the former GDR than in Poland during the communist period, and continue to be better today due to the higher level of socio-economic development in Germany. In both countries life expectancy at birth differs in terms of gender and the investigated period. Comparing Poland to East Germany, the difference in life expectancy is visible especially for men, where it was 3.1 years in 1985, and has risen to 4.7 years 5 Rates are defined as simple index numbers.
134 Dorota Witkowska in 2010, while for women this spread was 0.7 and 2 years in 1985 and 2010 respectively. Life expectancy in 2010 in comparison to 1985 increased in Poland by 8% (i.e. 5.8 years for females and 5.6 years for males) and in East Germany by 9% (7.1 years) and 10% (7.2 years) for women and men respectively. As a result, in 2010 in the former GDR women lived 5.8 years longer on average than men, while in Poland this difference was 8.5 years. It is also visible that the average life expectancy evaluated for the whole of Germany is higher than in the Eastern lands and in Poland, and in 2012 this difference was 2.2 years and 5.8 years for females and males, respectively. Table 3. Population with tertiary education, attainment of ISCED level 5-6; in 2013 State or region Percentage share of population Tertiary education graduates Total males females women per 100 men EU 27 25.4 23.8 27.0 143.2 Germany 25.1 26.7 23.6 122.4 Poland 22.6 18.5 26.7 193.9 Source: Own elaboration on the basis of data from Eurostat. Level of education is an important characteristic of a society, and it influences the level of economic development. In Poland the share of the population with the tertiary education is smaller than in Germany and the European Union (i.e. as the average of 27 states). However in Poland women are better educated than men, as 26.7% of women and only 18.5% men are college or university graduates, while in Germany we can observe the opposite situation i.e. the share of women with a tertiary education is slightly smaller than for men (Table 3). 3. Labour market in East Germany and Poland after the collapse of communist system The collapse of the centrally planned economies and the introduction of market reforms influenced the overall situation in all transitional states. The sudden exposure to competition from developed countries, together with the breakdown of traditional export markets, destroyed the prevailing national economies in all Central and Eastern European states. Following German unification, the economy in former GDR had to compete with West Germany and abroad, which caused an unprecedented increase in effective unemployment (Bonin, Zimmermann 2000). Immediately after unification, a complete collapse of productivity and employment in East Germany was avoided only with the aid of substantial transfers from West
Comparison of Womenʼs Situation… 135 Germany. 6 Ten years after unification the number of regularly employed persons in East Germany had declined by almost 40%, and the official German unemployment rate exceeded 19% of the labour force in the former GDR, while in former German Federal Republic this rate was less than 10% in 1999. In the former German Democratic Republic, like in other former Sovietbloc states, there was a high involvement of women in the labour force. Before the collapse of the communist system, more than 80% of women of working age participated in the labour market. In particular, it appears that women in the GDR were better integrated into the labour market than women of the former German Federal Republic (GFR), where participation rates were low by international standards. Based on the information given by Krueger and Pischke (1995 p. 419), in year 1988 female labour force participation in GFR was 49.6%, while in the GDR it was 81%. Bonin and Euwals (2002) note that after the unification of the two German states, the share of women residing in the area of East Germany who participated in the labour market declined, but only gradually. In May 2000, 72% of all women of working age in East Germany were employed or, if not, in search of employment. Although at that time the female participation rate in East Germany was lower than the rate before unification, it still substantially exceeded the corresponding rate of 62% for women residing in the area of West Germany. The moderate decline in female labour force participation in East Germany is quite remarkable considering that women have been facing high levels of unemployment since the collapse of employment opportunities at the outset of unification. The economic transition which followed thereafter brought the employment rate among women of working age to the West German level of 58%. Taking into consideration the situation in the labour market (Table 4 below), one can note that in both countries number of employed persons significantly decreased in 2010, by 14% in East Germany, and by 18% in Poland in comparison to 1985. Since the population did not radically decrease, this significant decrease in active employment seems to be connected with the early retirement programs that were introduced in both states to “make room” for younger workers and for migration of people of working age to different states, where better jobs and higher incomes were offered. In the former GDR this migration started just after the unification and was directed mainly to West Germany, while in Poland a significant wave of emigration began when Poland became a member of the European Union in 2004. 6 A discussion of East German unemployment can be also found in Merkl, Snower (2008).
136 Dorota Witkowska Table 4. Labour market situation Number of employed, in thousands Unemployment rate 7 Year East Germany Poland Germany East Germany Poland 1985 8937.00 17914.70 8.2* Full employment 1990 8789.00 16484.70 6.0 10.27 6.39 1995 7774.00 15485.70 9.2 13.23 14.51 2000 7463.00 15480.00 9.3 16.82 14.86 2005 7188.00 12890.70 11.4 18.34 17.70 2010 7718.00 14629.01 7.1 11.59 12.40 Rates 0.86 0.82 *FRG Source: Own elaboration on basis of data from: Polish and German Central Statistical Office worldometers.info. Data for the year 1985 Statistisches Jahrbuch der Deutschen Demokratischen Republik, Zeitschriftenband 1987, 1988. The economic activity rates (for males, females and the total population – total) evaluated for Germany, East Germany (as average from 6 Eastern lands i.e.: Berlin, Brandenburg, Mecklenburg-Vorpommern, Sachsen, Sachsen-Anhalt and Thüringen) and Poland in years 1999–2014 are presented in Table 5. Table 5. Labour participation rates for persons aged 15-64 Economic activity rate Year Poland Germany East Germany Total Males Females Total Males Females Total Males Females 1999 65.8 72.1 59.6 71.2 79.3 62.9 74.5 78.5 70.4 2000 65.8 71.7 59.9 71.0 78.8 63.0 73.8 77.7 69.7 2001 65.5 71.5 59.8 71.3 78.8 63.7 73.6 77.4 69.6 2002 64.6 70.6 58.7 71.5 78.7 64.2 73.4 77.0 69.6 2003 63.9 70.0 58.1 72.1 79.0 65.0 73.9 77.4 70.4 2004 64.0 70.2 58.0 72.1 79.0 65.1 74.4 77.6 71.1 2005 64.4 70.8 58.1 74.3 80.6 68.0 76.3 79.4 73.0 2006 63.3 70.0 56.7 75.3 81.3 69.3 77.6 80.6 74.4 2007 63.2 70.0 56.5 76.0 81.8 70.2 78.6 81.6 75.4 2008 63.8 70.9 57.0 76.5 82.1 70.8 79.0 82.0 75.9 2009 64.7 71.8 57.8 76.9 82.3 71.4 79.9 82.8 76.9 2010 65.3 72.1 58.5 76.6 82.3 70.8 80.0 83.2 76.6 2011 65.7 72.6 58.9 77.3 82.7 71.9 80.2 83.3 76.9 7 Own calculation as a percentage share equal to: number of unemployed /(number of employed+ number of unemployed).
Comparison of Womenʼs Situation… 143 Table 12. Relation between average wages in selected EU member states in 2014 State or region Relation to average in EU Relation to average in Germany Total Males Females Total Males Females EU 27 100.00 100.00 100.00 79.42 79.26 80.66 Germany 125.91 126.16 123.98 100.00 100.00 100.00 Poland 33.26 32.15 35.03 26.42 25.48 28.25 Denmark 178.68 179.62 182.67 141.91 142.37 147.34 Bulgaria 15.01 14.43 16.05 11.92 11.44 12.95 Source: own elaboration on basis of Eurostat data. Table 13. Comparison of average women’s to average men’s wages (man’s wage =100) by NACE branches; for Poland Codes NACE branches 2001 2003 2006 2009 A1 Private farms in agriculture 100.50 99.80 78.00 76.2 A2 Agriculture, forestry and fishing, excluding (A1) 118.60 125.20 100.40 89.1 B Mining and quarrying 89.80 79.80 76.40 86.8 C Manufacturing 75.80 82.10 76.80 79.5 D-E Electricity, gas and water supply 108.70 90.20 75.90 95.3 F Construction 86.20 105.90 102.90 102.2 G Wholesale and retail trade, repair of motor vehicles, motorcycles and personal and household goods 74.00 72.20 80.70 77.4 H Transport, storage and communication 97.90 82.50 94.50 88.0 I Accommodation and food service activities 93.50 95.50 88.30 74.5 K Financial intermediation 137.70 79.40 67.00 81.7 L Real estate, renting and business activities 85.20 90.40 80.00 92.2 O Public administration and defense, compulsory social security 85.80 83.70 81.20 80.9 P Education 115.40 91.30 84.90 92.0 Q Health and social work 78.50 83.40 81.30 83.5 S Other community, social and personal service activities 67.60 77.70 77.50 79.6 All VACE branches 84.57 83.91 81.40 83.15 Source: Own calculation on the basis of Polish Labour Force Survey. Analyzing the data presented in Table 14 below, one can see that GPG is bigger in Germany than in Poland in all but two types of economic activities. Only in Financial and insurance activities and in Public administration, defense and compulsory social security, wage disparities are smaller in Germany than in Poland.
144 Dorota Witkowska Table 14. The unadjusted GPG in 2012 by NACE economic activity, working profile and sector Economic activity (NACE code) Germany Poland Business Economy (B to N) 25.6 15.6 Manufacturing (C) 26.4 21.4 Electricity, gas, steam and air conditioning supply (D) 21.1 7.2 Construction (F) 13.1 -10.3 Financial and insurance activities (K) 30.0 36.9 Public administration and defense; compulsory social security (O) 7.4 17.6 Education (P) 7.9 1.6 Arts, entertainment and recreation (R) 21.2 8.3 Other service activities (S) 22.3 30.6 Working profile Part-time 11.7 13.5 Full-time 20.6 6.2 Sector Public 14.0 3.7 Private 25.7 16.1 Source: Eurostat http://epp.eurostat.ec.europa.eu. 5. Conclusions When market reforms were first introduced, women in both the former GDR and Poland lost their jobs and their maternity and child-care benefits. 14 In other words, they lost the forms of equality that communism had brought, and the first years of transformation were extremely difficult for women because they were jobless more often than men, and in addition it was often argued that they should be more domesticated and somehow more docile. As a result of our investigation we found that the situation of women in both countries has changed following the collapse of the communist system in Eastern Europe. However in former German Democratic Republic women, after a significant decrease in their participation in the labour market in the early transition period, became very active, even more than women in the Western lands. It is enough to recall that in 2014 their economic activity rate equalled 76.7% for 14 Profound analysis of the Polish case is provided by Cukrowska 2011.
Comparison of Womenʼs Situation… 145 East Germany and 72.9 for the whole country, while in Poland this rate remained lower by 10 percentage points and in 2014 was 61.1%. In general, women earn less than men in both parts of Germany as well as in Poland. However, the gender pay gap is larger in the Western part of Germany than in the Eastern part (former GDR). The income differences are the smallest for hourly wages and the largest for annual earnings. The gender pay gap in Germany is one of the highest in Europe, while in Poland it is one of the smallest. Interesting results are obtained for construction branch in Poland, where women earn more than men, which can be explained by the fact that in this particular branch women are employed in senior positions which require higher education. To conclude our considerations, it might be said that under the centrally planned system women’s position in the labour market was clearer, in part because of the existence the full employment rule. But women adapted themselves to the new situation, as is clearly visible in the Eastern Part of Germany. In marketoriented economies, turbulences affect all employees and women’s position in the labour market depends on several factors such as education, occupation, economic sector, etc. The opinions concerning women’s situation in transitional countries differ among researchers and politicians. In discussing German female employees, Bennhold (2010) states that: “Eastern women are more self-confident, bettereducated and more mobile, recent studies show. They have children earlier and are more likely to work full time. More of them are happy with their looks and their sexuality, and fewer of them diet. While Western women earn 24 percent less than men, the pay gap in the East is a mere 6 percent (although the overall levels of pay are lower).” However one may also find opinions that, in the former GDR “women are the losers of the reunification” (Shomaker 1996). After 25 years of economic transformation a new generation of women has been entering the labour market. On one hand they know that both genders should be treated in the same way, and especially that they should have equal opportunities and a gender pay gap should not exist. But on the other hand they appreciate the important demographic problems faced by European societies and realize how hard it might be to harmonize family duties and a professional career. References Adamchik V. A. Bedi A. S. (2003), Gender Pay Differentials During the Transition in Poland, ‘Economics of Transition’, Wiley-Blackwell, Oxford – Malden, Vol. 11 (4).
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148 Dorota Witkowska Witkowska D. (2013), Zmiana sytuacji kobiet w Polsce w okresie transformacji, [in:] Sawicka J. (ed.), ʻRynek pracy na obszarach wiejskich Mazowsza – perspektywa genderʼ, Wydawnictwo Szkoły Głównej Gospodarstwa Wiejskiego (SGGW), Warszawa. Yearbook of Labour Statistics 2010 (2011), Central Statistical Office, Warszawa. Data sources: http://appsso.eurostat.ec.europa.eu/nui/submitViewTableAction.do?dvsc=0 http://epp.eurostat.ec.europa.eu http://appsso.eurostat.ec.europa.eu/nui/submitViewTableAction.do?dvsc=0 http://epp.eurostat.ec.europa.eu http://www.digizeitschriften.de/dms/toc/?PPN=PPN514402644. http://www.stat.gov.pl/cps/rde/xbcr/gus/p_population_size_structure_31_12_2010.pdf http://www.worldometers.info/world-population/germany-population/ Streszczenie PORÓWNANIE SYTUACJI KOBIET NA RYNKU PRACY W DAWNEJ NRD I POLSCE Minęło 25 lat od upadku muru berlińskiego i rozpoczęcia transformacji w krajach byłego bloku wschodniego. Celem analiz jest zbadanie jak zmieniła się sytuacja kobiet w byłej Niemieckiej Republice Demokratycznej i w Polsce, które to kraje zmieniały gospodarkę na rynkową według zupełnie innych schematów. W wyniku badań stwierdzono, że sytuacja kobiet w obu krajach uległa zmianie. Jednakże o ile kobiety we wschodnich landach niemieckich, po znacznym spadku ich udziału w rynku pracy na początku transformacji, wykazują większą aktywność zawodową niż kobiety w pozostałych landach, to kobiety w Polsce są w dalszym ciągu znacznie mniej aktywne niż obserwowano to w okresie funkcjonowania gospodarki centralnie planowanej. Słowa kluczowe: rynek pracy, transformacja gospodarki, nierówności implikowane płcią