DP11601 Social Ties for Labor Market Access - Lessons from the Migration of East German Inventors

Author(s): Stefan Bender, Matthias Dorner, Dietmar Harhoff, Tina Hinz, Karin Hoisl
Publication Date: November 2016
Keyword(s): East Germany, inventors, migration, networks, social ties, transition
JEL(s): J60, O30, P20, R23
Programme Areas: Industrial Organization
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=11601

We study the impact of social ties on the migration of inventors from East to West Germany, using the fall of the Iron Curtain and German reunification as a natural experiment. We identify East German inventors via their patenting track records prior to 1990 and their social security records in the German labor market after reunification. Modeling inventor migration to West German regions after 1990, we find that Western regions with stronger historically determined social ties across the former East-West border attracted more inventors after the fall of the Iron Curtain than regions without such ties. However, mobility decisions made by inventors with outstanding patenting track records (star inventors) were not impacted by social ties. We conclude that social ties support labor market access for migrant inventors and determine regional choices while dependence on these ties is substantially reduced for star performers.