Wage patterns in West Berlin: a synthetic control approach after the fall of the wall

Abstract

We investigate the impact of the Berlin Wall's fall on West Berliners' salaries using the Synthetic Control Method and regional-level data (NUTS-2) from the German Socio-Economic Panel (SOEP). Our study shows that the collapse of the Berlin Wall led to a sudden stagnation in salaries for West Berliners, compared to a scenario where the Wall had remained intact.