Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/232901 
Year of Publication: 
2021
Series/Report no.: 
IZA Discussion Papers No. 14149
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
Job loss expectations were widespread among workers in East Germany after reunification with West Germany. Though experiencing a large negative employment shock, East German workers were still overpessimistic immediately after reunification with respect to their job risk. Over time, job loss expectations fell and converged to West German levels, which was driven by a stabilizing economic environment and by an adaptation of the interpretation of economic signals with workers learning to distinguish individual risk from firm level risk. In fact, conditional on actual job loss risk, East German workers quickly caught up to West Germans regarding the accuracy of job loss expectations.
Subjects: 
job loss
expectations
transition economies
JEL: 
D84
J64
J63
P20
Document Type: 
Working Paper

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