Between East and West? East Germany’s Employment System in a Dynamic Comparison

Abstract

This article investigates how working conditions in East Germany differ from those in West Germany as well as from those among its Central and Eastern European (CEE) neighbors (Czech Republic, Hungary, and Poland). Building on repeated International Social Survey Programme (ISSP) survey data (1989, 1997, 2005, and 2015), the author compares key elements of East Germany’s employment system with West Germany and its CEE neighbors over time. The results show that, initially, East Germany’s conditions resembled a logic reflecting the need for economic survival that was distinct from West Germany and from the emerging general patterns of its CEE neighbors. By 2015, East and West German working conditions nearly converge. This article develops and extends the employment system approach to address situations of transformation and substantial institutional change, and contributes to the ongoing debate on regional diversity in Germany’s economy.

Keywords

employment international comparisons employment systems labor standards workplace

Working conditions in East Germany have developed against the background of tremendous political and socioeconomic shifts. The transition from a state–socialist economy to a market economy in a reunified Germany resembles an enormous institutional experiment. This transition is part of an even larger development, the fall of the Iron Curtain, which also transformed neighboring Central and Eastern European (CEE) countries, such as the Czech Republic, Hungary, and Poland. In this transition process, East Germany resides historically and economically between West Germany and its CEE neighbors. Thus, East Germany’s in-between status poses a theoretical and empirical challenge for institutional and comparative research. Researchers disagree on what to expect from working conditions in East Germany.

Many scholars view East Germany as a fully integrated part of the reunified Germany and its overall socioeconomic model. Analyses of the German model were based on empirical studies of West Germany’s institutional and socioeconomic conditions in the 1980s. This idea of a particular German model resonated with influential contributions to the comparative capitalisms literature (Jackson and Deeg 2008). In many of these and other studies, Germany as a whole still serves as a primary case for empirical comparisons (e.g., Frege and Godard 2014). Their implicit assumption is that differences between East and West Germany are small or negligible, and that both follow a more or less similar logic.

By contrast, other scholars view East Germany as a prime example of regional diversity within national institutional frameworks. In fact, the abovementioned approach of a unified German model has drawn criticism. Several authors have suggested that national institutional frameworks are often inconsistent, and that actors can and do escape from them (Lane and Wood 2012). In this debate, East Germany serves as a primary example of diversity within national models. Indeed, this research has provided several instances showing that work and employment conditions in East and West Germany differ considerably (e.g., Buss and Wittke 2005). Early studies portrayed East German firms as workbenches, describing working conditions similar to the neighboring CEE countries. Overall, this line of empirical work favors the thesis of regional diversity within Germany’s economy.

These two opposing views in the literature on East Germany call for empirical investigation. The employment system approach (Fligstein and Byrkjeflot 1996) assumes that distinct working conditions develop because they are governed by dominant logics that reflect specific institutional conditions. A dominant logic represents an institutionalized order of elements that govern the ways in which work and employment are organized. To date, the dominant logic that governs working conditions in East Germany’s employment system is not well understood. The literature builds predominantly on case study evidence that has left the question of generalizability unanswered. In particular, we do not know how East Germany’s employment system compares empirically to those of West Germany and its CEE neighbors (the Czech Republic, Hungary, and Poland).

Furthermore, the conception of a more or less distinct East German employment system raises another important issue—dynamic developments over time. A key problem here is that general models often assume categorical differences that build on static properties and enduring qualities of employment systems. Such an approach seems particularly prone to failure in the face of highly dynamic transformation processes, as is the case with East Germany and its CEE neighbors. Over time, East Germany may exhibit various logics, as it consecutively converges on or diverges from given patterns. A dynamic perspective could shed light on the underlying forces that shape the emerging logic of East Germany’s employment system.

Against this background, I ask: How does East Germany’s employment system compare to the employment systems of West Germany, the Czech Republic, Hungary, and Poland? And, how has East Germany’s employment system developed over time? To answer these questions, I extend the employment system approach to theoretically frame and explain working conditions in East and West Germany, the Czech Republic, Hungary, and Poland. My empirical investigation focuses on three key dimensions of employment systems: employment conditions, advancement opportunities, and job design. I draw on repeated International Social Survey Programme (ISSP) survey data (data set years 1989, 1997, 2005, and 2015) to compare the employment systems of West and East Germany, the Czech Republic, Hungary, and Poland over time.

The article contributes to the ongoing debate on regional diversity within Germany’s economy. It also further develops and extends the employment system approach to address situations of transformation and substantial institutional change.

Theoretical Background

The Employment Systems Approach: Dominant Logics and Key Dimensions

To investigate and understand the various ways work and employment are organized, Fligstein proposed the employment system concept (Fligstein and Byrkjeflot 1996; Dobbin and Boychuk 1999; Fligstein 2001), according to which a specific logic shapes the organization of work and employment. Following March’s (1994) seminal concept, such logics represent dominant logics of appropriateness (Frege and Godard 2014),¹ which guide actors’ decision-making, expectations, and activities (similarly, Deeg 2001; Streeck and Thelen 2005).

In Fligstein’s employment system concept, distinct logics emerge from historical struggles in which organized actors (e.g., employers’ associations, unions, government bodies) eventually compromise on the ways in which work and employment are governed (Fligstein and Byrkjeflot 1996). “This compromise then becomes a set of cultural practices and understandings that functions as a template or worldview that helps actors make sense of their worlds and operates as a tool for the construction of action and career expectations” (Fligstein and Byrkjeflot 1996: 12). Building on related approaches, one can add that actors’ power resources—especially the resources of organized labor (Korpi 2006; Gallie 2007)—shape this compromise. Key elements often become part of regulative institutions (e.g., labor regulation, laws on employee representation), as the state recognizes the established compromise (Fligstein and Byrkjeflot 1996). Thus, dominant logics of employment systems provide general orientation, power resources, and formal rules regarding how to organize work and employment.

The literature identifies several key aspects of national employment systems (Fligstein and Byrkjeflot 1996; Dobbin and Boychuk 1999; Fligstein 2001). I focus on three key dimensions and their core elements:

Employment conditions account for the diverse aspects that govern employment, shaping employees’ job security and income levels. Whereas some employment systems enable long-term job tenure, others build on low employment security (Fligstein and Byrkjeflot 1996). This aspect is most visible in the diverse modes of institutional regulation that frame employment contracts and unemployment benefits across countries (Dobbin and Boychuk 1999; Amable 2003; Gallie 2007). Such regulations also govern employees’ income levels, enabling jobs with high wages or fostering low-wage employment.

Advancement opportunities describe the general opportunities for advancement alongside the distribution of authority in the workplace (Fligstein and Byrkjeflot 1996). Some employment systems enable advancement opportunities that allow for specific career paths. By contrast, other employment systems lack such career opportunities. Furthermore, employment systems differ in the ways in which managers share authority (Fligstein and Byrkjeflot 1996; Dobbin and Boychuk 1999; also Whitley 2016). Whereas some employment systems concentrate authority in a few positions, other employment systems distribute responsibilities within the workforce, allowing many employees to act in supervisory roles.

Job design describes distinct ways in which work tasks are organized. These methods vary substantially across employment systems, especially owing to diverse forms of managerial control (Dobbin and Boychuk 1999). Some systems concentrate authority in managerial positions and enforce routines. Other systems prompt managers to share authority and to grant employees substantial discretion in the workplace (Appelbaum, Bailey, Berg, and Kalleberg 2000; Marsden 2015). This approach allows for more job autonomy and creates more interesting work tasks—breaking away from dull routines and tight managerial control (Streeck 1991).

Thus, a dominant logic in an employment system represents an institutionalized order that governs and organizes elements of work and employment to shape working conditions. Employment systems differ because elements across key dimensions vary substantially. Considering potential differences between East and West Germany, I apply the employment system approach to regional differences within Germany, acknowledging that countries may have multiple employment systems (Fligstein 2001: 117).

Categorical Differences: Three Logics of East Germany’s Employment System

Reflecting underlying continuous institutional properties and dominant logics of appropriateness, employment systems should exhibit enduring elements that shape working conditions. In this view, employment systems represent (more or less) static categories that denote categorical differences between distinguishable systems. The literature provides cues for several options for the logic of East Germany’s employment system and its key elements. In the following sections, I outline three possible ideal–typical logics.

Reunified Logic

A first analytical option is that the logic of East Germany’s employment system generally conforms to the West German template. In the comparative literature, West Germany presents a cornerstone, populating most of the established comparative typologies (Whitley 1999; Hall and Soskice 2001; Amable 2003; Jackson and Deeg 2008). The traditional view of West Germany’s employment system was shaped by the historical emergence of a particular production system. Capturing key aspects of this West German production system, Streeck (1991) coined the term diversified quality production (DQP). In a comparable effort, Fligstein (2001; also Fligstein and Byrkjeflot 1996) classified Germany as the “purest case” of vocationalism. Historically, West Germany’s industry relied on a skill-intensive production system focused on exports. Strong unions provided employees with substantial power resources (Gallie 2007; Frege and Godard 2014), supporting their interests in favorable working conditions.

Thus, a reunified logic mostly exhibits the ideal–typical traits of Western Germany’s employment system: Beneficial constraints enable favorable employment conditions with a focus on flexibility and company-specific skills (Streeck 1991). For employees, this comes with high job security and high wages. The traditional West German model also provides employees with advancement opportunities. Internal careers and mutual commitment to company-specific skill-development create promising career opportunities. Furthermore, managers share workplace responsibilities with employees (Whitley 2016), granting limited supervisory roles even for regular employees, for instance, overseeing work processes or instructing vocational trainees. Job design in West Germany’s employment system is shaped by a traditionally strong position of skilled employees and shared responsibilities. This strategy enables a decentralized approach to management, allowing for a job design that breaks away from Taylorism (Streeck 1991). Here, polyvalent and flexible organizational structures reduce dull, routine tasks and allow for high workplace autonomy and interesting work.

Workbench Logic

A second analytical option is that the logic of East Germany’s employment system tends toward the logic of its CEE neighboring countries. Faced with the unique challenges of post–Iron Curtain transformation, many CEE countries (including the Czech Republic, Hungary, and Poland) have reformed their economies and their institutional frameworks. Markets have been deregulated and firms have been privatized (Bluhm 2007; Nölke and Vliegenthart 2009). West German firms had developed their production, employment, and market strategies over decades. By contrast, forced to compete on international markets, firms in former socialist countries were obliged to eke out a place using then outdated production technologies on markets in which incumbents were already holding and defending their market shares.

Scholars termed the emerging institutional frameworks in CEE countries, such as the Czech Republic, Hungary, and Poland, dependent market economies (Nölke and Vliegenthart 2009; also King 2007; Bohle and Greskovits 2012). The evolving post-socialist regulations sought to attract foreign direct investment (FDI). In the transformation process, politicians and industrial relations actors seemed unable to effectively advocate workers’ interests (Ost 2005; Meardi 2012; Drahokoupil and Myant 2015). Thus, the institutional design catered to the interests of transnational corporations, which hold the trump card of relocating further east (Nölke and Vliegenthart 2009). Others noted that the post-transitional models moved along a fragile “low-road, FDI-driven trajectory” (Bosch, Lehndorff, and Rubery 2009: 26).

In this scenario, East Germany’s employment system would exhibit conditions that resemble a workbench logic, following the imprints of a low-road approach to work and employment: here, employment conditions reflect lightly regulated frameworks (Nölke and Vliegenthart 2009: 679; also King 2007). Large, exemplary firms use broad margins of insecure employment and restrict job security to a small core of the workforce (Jürgens and Krzywdzinski 2009). Wages stay low because moderate labor costs constitute a competitive advantage. The impact of lower income levels on employees is exacerbated by incomplete social pacts (Nölke and Vliegenthart 2009; also Bohle and Greskovits 2006; Meardi 2007), resulting in limited welfare benefits. This outcome lowers job security and enables low-wage employment. The low-road approach offers fewer advancement opportunities. Owner-managers in transitional countries resort to paternalistic management styles and rarely share authority with employees (Whitley 2016). Subsidiaries and production sites of transnational corporations lack major strategic functions that are integral to headquarters (Nölke and Vliegenthart 2009). Overall, this reduces career opportunities for employees and lowers the likelihood of their acting in a supervisory role. Although case studies report that major firms implement some aspects of high-road strategies, firms generally focus on standardization, thereby generating more conservative forms of work organization (Jürgens and Krzywdzinski 2009). Overall, employees in these types of firms face lower discretion, resulting in lower autonomy levels and less interesting work.

Survivalist Logic

A third analytical option is that the logic of East Germany’s employment system has developed along an independent transformation path. While East Germany reunified with West Germany, the Czech Republic, Poland, and Hungary embarked on transformation paths as independent countries. On these paths, firms and employees faced similar challenges of sudden international competition, and case study research results suggest that East German firms avoided direct price competition with CEE companies (Buss and Wittke 2004, 2005, 2006). Fighting for economic survival, firms acted highly opportunistically. This strategic openness to market developments allowed firms to secure market niches, building on a skilled but highly flexible workforce. Following this line of research, East German firms generated additional resources by reinterpreting West Germany’s formal institutional framework (Buss and Wittke 2005; Crouch, Schröder, and Voelzkow 2009). For instance, the lack of a full-fledged industrial relations system served as a competitive resource because West Germany’s institutional limitations to wages and employment flexibility were not enforced. Other research suggested that firms formed survival communities (Behr 2000) that rallied around the shared interests of employees and employers for company survival.

According to this third option, East Germany would follow a survivalist logic, whereby the employment system revolves around preserving employment by capitalizing on high flexibility and wage moderation: The employment conditions reflect employees’ acceptance of less job security and lower wage levels as part of their employment relationship (Buss and Wittke 2004). Here, employees make substantial concessions in wages and flexibility in order to secure employment. Bernhardt and Krause (2014) found that East German employees agreed to a distinct psychological contract, one that promises long-term employment if employees meet intensive workplace demands. In fact, overall lower job security serves as a key motivator for employees, as their insecurity mirrors their firms’ fight for survival (Behr 2000). Compared to the reunified logic above, advancement opportunities should exhibit lower levels because the survivalist logic focuses on the preservation of the status quo. This approach does not require systematic career progression as an incentive for specific qualifications, and it should result in overall lower opportunities for career advancement and fewer employees in supervisory roles. Job design follows the need for high operational flexibility to seize market opportunities. Authority in the workplace is shared, and employees enjoy high discretion. This model results in high autonomy levels and more interesting work, since tasks need to be performed flexibly in order to react to constantly changing market demands.

Table 1 briefly summarizes the characteristics of the three possible logics for East Germany’s employment system.

Table 1.

Three Logics and Expected Working Conditions

	Logic
Dimension	Reunified	Workbench	Survivalist
Employment conditions	High	Low	Low
Advancement opportunities	High	Low	Low/Medium
Job design	High	Low	High

Notes: Dimensions and their elements: employment conditions (job security, high income); advancement opportunities (career opportunities, supervisory role); job design (interesting work, independent work).

Dynamics of Transformation: Employment Systems over Time

A strong focus on change over time obscures the view of employment systems as static categories. In fact, the view of highly stable, path-dependent models has drawn much criticism and has faced the reproach of being unable to address change (Streeck and Thelen 2005). Here, the employment system approach offers a dynamic concept, since it assumes an enduring order that shifts when substantial conditions deviate or actors arise to challenge existing orders (Fligstein and Byrkjeflot 1996). A perspective of change is especially pertinent for the investigation of East Germany, as, after all, transition denotes a process of change from one state to another.

Facing this puzzle of transformation, the abovementioned ideal–typical logics still help to track East Germany’s employment system. Streeck and Thelen (2005: 18) posited that fundamental change “ensues when a multitude of actors switch from one logic of action to another.” Thus, a substantially shifted order of elements represents a new logic. The outlined logics provide a general guideline with which to approach the dynamics of East Germany’s employment system. In a dynamic perspective, several scenarios outline distinct trajectories of East Germany’s employment system over time.

First, East Germany’s employment system converges toward West Germany’s and follows a reunified logic. In fact, early analyses assumed that production systems in East Germany could easily adapt to the West German template because conditions could be more similar than is often perceived (Sorge 1993). Most important, the reunification process also involved much political effort by the German state to harmonize socioeconomic conditions, for instance, via extensive subsidies and targeted infrastructure projects. A recent analysis reported some areas of persistent differences alongside a general tendency toward convergence (Statistische Ämter des Bundes und der Länder 2015).

Second, East Germany’s employment systems converge toward a workbench logic shared with its CEE neighbors, the Czech Republic, Hungary, and Poland. Early empirical studies pointed out that many East German firms served as extended workbenches for large West German companies (Windolf 1996). Others argued that prominent East German subsidiary sites acted as “lab mice” for deregulated, insecure employment, and experimental job designs (Brinkmann 2005; also Gerst, Hardwig, Kuhlmann, and Schumann 1995; Holst, Nachtwey, and Dörre 2009), fostered by high unemployment rates and a weaker industrial relations system. This weakness of employee representation is a commonality among East Germany and its CEE neighbors (Nölke and Vliegenthart 2009). Early investigations of East Germany, especially, described outlines of a workbench logic that also took hold in CEE employment systems (Bluhm 2007).

A third position follows case study evidence positing that East Germany’s employment system continuously differs from its East European neighbors as well as from West Germany. Research by Buss and Wittke (2005) suggested that East Germany’s economy has evolved along an alternative transformation path. Elements of West Germany’s institutional framework do not work in East Germany, or at least not in the same way (Buss and Wittke 2005; also Crouch et al. 2009). In an unsuitable formal institutional environment, East German firms freed themselves from West German templates and developed alternative strategies along an alternative logic of appropriateness.

Finally, a dynamic perspective should also consider that West Germany’s traditional model has eroded and may converge to East Germany. This view represents an important caveat to the outlined ideal–typical West German model. Scholars have questioned and fundamentally reconsidered the traditional German model, highlighting substantial transformations (Streeck 1997; Fligstein 2001; Jackson and Sorge 2012). Perhaps most important, an increasing number of scholars have highlighted the decline of the industrial relations system (Bosch, Haipeter, Latniak, and Lehndorff 2007; Marsden 2015) alongside a rising dualism in Germany’s labor market (Thelen 2012; Hassel 2014; Marsden 2015). This dualism has fostered the growth of insecure and low wage employment, also in West Germany. Thus, shifts in the traditional West German model may move employment systems in East and West Germany closer together.

Data, Variables, and Methods

Data

Data from the International Social Survey Programme (ISSP) provide the empirical basis for my analysis. The ISSP conducts cross-national annual surveys of persons aged 18 and older on various topics.² In 1989, the ISSP implemented the work orientations module for the first time; it was partially replicated in 1997, 2005, and 2015 (ISSP Research Group 1991, 1999, 2013, 2017). A broad range of studies have employed this data set module for comparative studies of working conditions (e.g., Sousa-Poza and Sousa-Poza 2000; Yaish and Stier 2009; Olsen, Kalleberg, and Nesheim 2010; OECD 2014).

I compiled a subsample from the ISSP work orientations module for all respondents from Germany, the Czech Republic, Hungary, and Poland³ who reported paid weekly working hours. I included employed and self-employed respondents to account for, and later control for, potential underlying shifts in the workforce (e.g., increased use of contracts for labor).⁴

The data for Germany include a variable that identified respondents from East and West Germany. However, not all countries participated in every survey replication. For 1989, data are available for only West Germany and Hungary. The 2005 survey did not include Poland. With this exception, all the other countries participated continuously from 1997 onward. My basic sample from 1997 on comprised five employment systems and covered 9,343 respondents (see Table 2): 2,692 from West Germany, 892 from East Germany, 1,957 from the Czech Republic, 2,318 from Hungary, and 1,484 from Poland.

Table 2.

Respondents by Employment System and Year

	Year
	1989	1997	2005	2015	Total
Employment system
West Germany	669	729	580	714	2,692
East Germany	—	276	296	320	892
Czech Republic	—	469	661	827	1,957
Hungary	643	702	420	553	2,318
Poland	—	567	—	917	1,484
Total	1,312	2,743	1,957	3,331	9,343

Source: International Social Survey Programme (ISSP) data from 1989, 1997, 2005, 2015.

Notes:— indicates that the country/region did not participate.

Variables

Three key dimensions apply to the respondents’ current job, and six dependent variables indicate the elements of the individual employment systems.

Employment conditions: Job security was addressed by answers to the statement, My job is secure (between 5 = strongly agree and 1 = strongly disagree); for high income, respondents were presented with the statement, My income is high (between 5 = strongly agree and 1 = strongly disagree).

Advancement opportunities: Career opportunities were addressed by responses to the statement, My opportunities for advancement are high (between 5 = strongly agree and 1 = strongly disagree). For acting in a supervisory role, respondents answered a general question about whether they supervise other employees (1 = supervises others, 0 = otherwise).⁵ For instance, Yaish and Stier (2009) previously used this binary measure with ISSP data from 2005. Going beyond formal, managerial workplace authority (Smith 2002), this item denotes a first step toward shared authority and shared responsibilities in the workplace. Thus, acting in a supervisory role accounts for the general distribution of responsibilities also involving regular employees: for instance, holding a Meister position in Germany.

Job design: Interesting work was addressed by responses to the statement, My job is interesting (between 5 = strongly agree and 1 = strongly disagree). To measure independent work, respondents were presented with the statement, I can work independently (between 5 = strongly agree and 1 = strongly disagree).

The key independent variable is the combined information on the respondents belonging to employment systems and the survey year, as outlined in Table 2. This information identifies employment systems and tracks their characteristics over time.

For further analysis, I included control variables. Basic control variables comprise respondent age, sex (1 = female, 0 = male), and self-employed (1 = yes, 0 = no). Further control variables included working hours (as in the number of working hours per week), a respondent’s union membership status (1 = yes, 0 = no), and information about a respondent’s skills level. I created a harmonized variable with four basic skill level categories: 1) High-skilled, white-collar; 2) Low-skilled, white-collar; 3) High-skilled, blue-collar; 4) Low-skilled, blue-collar. These four broad categories integrated the occupational classifications from 1997 and 2005 (ISCO88 standard) with the revised occupational classification from 2015 (ISCO08 standard).⁶ I included these further control variables for the analysis from 1997 onward only, for two reasons: First, some variables differ between 1989 and later survey waves.⁷ Second, the ISSP has covered most employment systems since 1997 only.

Table 3 reports the descriptive statistics and correlations for the dependent and control variables, including respondents from 1997, 2005, and 2015 only.

Table 3.

Descriptive Statistics for Dependent and Control Variables

No.	Stats					Correlations
	N	Mean	SD	Min	Max	No. 1	2	3	4	5	6
Dependent variables
1 Job security	7,620	3.58	1.09	1	5	1
2 High income	7,712	2.55	1.01	1	5	0.40***	1
3 Career opportunities	7,548	2.50	1.02	1	5	0.34***	0.49***	1
4 Supervisory role (binary)	7,767	0.29	0.45	0	1	0.13***	0.23***	0.21***	1
5 Interesting work	7,742	3.75	0.99	1	5	0.29***	0.33***	0.36***	0.24***	1
6 Independent work	7,732	3.81	1.04	1	5	0.27***	0.27***	0.23***	0.22***	0.48***	1
Control variables
7 Age	7,955	41.89	11.73	18	90	0.03**	0.00	−0.16***	0.03***	0.02*	0.08***
8 Sex: Female = 1	8,028	0.48	0.50	0	1	−0.02	−0.14***	−0.08***	−0.14***	−0.03**	−0.05***
9 Self-employed: Yes = 1	7,882	0.13	0.34	0	1	−0.01	0.07***	0.01	0.05***	0.09***	0.22***
10 Working hours (in weekly hours)	8,031	42.33	12.90	1	89	−0.01	0.10***	0.09***	0.10***	0.05***	0.06***
11 Union member: Yes = 1	7,890	0.16	0.37	0	1	0.05***	0.02	0.00	0.05***	0.03**	−0.01
12 Skills level: High-skilled, white-collar	7,708	0.38	0.48	0	1	0.13***	0.23***	0.18***	0.27***	0.30***	0.18***
13 Skills level: Low-skilled, white-collar	7,708	0.24	0.43	0	1	−0.02*	−0.08***	−0.01	−0.06***	−0.04***	−0.05***
14 Skills level: High-skilled, blue-collar	7,708	0.22	0.41	0	1	−0.04***	−0.06***	−0.06***	−0.07***	−0.08***	−0.01
15 Skills level: Low-skilled, blue-collar	7,708	0.17	0.37	0	1	−0.10***	−0.14***	−0.16***	−0.18***	−0.26***	−0.17***

Source: International Social Survey Programme (ISSP) data from 1997, 2005, 2015.

Notes: Excludes respondents from 1989. SD, standard deviation. See the Online Appendix for additional information.

Statistically significant at the p < .05 level; ** at the p < .01 level; *** at the p < .001 level.

Methods

To test my theoretical considerations elaborated above, I used the six dependent variables as subjective indicators for the working conditions shaped by the institutional properties that underlie the employment systems investigated. Building on extant studies (Olsen et al. 2010), I assume here that the relative differences in subjectively reported working conditions indicate the theoretically deduced differences in the underlying logics across employment systems. To reveal not only static differences but also possible dynamics, I focused my analysis on change across time and across employment systems. I proceeded in two steps.

In a first general step (step 1), I visualized the categorical differences and the dynamics of the employment systems over time. I computed ordinary least squares (OLS) regressions for five dependent variables and logit regressions for the binary variable on the supervisory role. Only in these initial regressions did I utilize the complete data set from 1989 to 2015, thereby providing additional data for West Germany and Hungary in 1989. I included variables on employment systems and survey year alongside a set of basic control variables (age, gender, self-employed status). To visualize key differences and dynamics, I predicted marginal effects (Mitchell 2012) for the interaction of employment system and survey year.

In step 2, I tested the robustness of my initial findings. Using the data sets from 1997 onward only, I included further control variables (working hours, union membership, and skills level) and computed OLS regressions as well as ordered logit regressions (Long and Freese 2006), with and without control variables (the Online Appendix documents various alternative models and their results). This approach followed previous investigations (Olsen et al. 2010) and ensured the correct application of regression models and the results’ robustness. My extensive tests with alternative models revealed overall robust results, which are mostly unaffected by the particular regression method performed or the particular set of control variables included. Despite the influences of factors, such as union membership or skills level, the overall differences between employment systems and over time remained.

Results

In step 1, I visualized substantial differences between—and the general dynamics of—the five employment systems. Figure 1 depicts my initial results. Each of the six sub-graphs documents the dynamics of one element of the five employment systems over time. In step 2, I performed detailed regression analysis for data from 1997 and onward only.

Figure 1.

Elements of Employment Systems over Time (OLS Results for Depiction)

Next, I interpret the combined results from step 1 and step 2, with a focus on differences between East and West Germany. Because Hungary occupies a middle position on most of the dependent variables, I additionally focus on it as representative for the three CEE employment systems. Both steps reveal very similar results. Given the ordinal nature of five of the dependent variables, however, I prefer the ordinal regression results to the OLS results for my final interpretation. Table 4 and Table 5 report the results using odds ratios (OR).

Table 4.

Regression Models I: Ordered Logit Regressions (Odds Ratio Reported)

Model: Variable	1: Job security		2: High income		3: Career opportunity
	OR	(SE)	OR	(SE)	OR	(SE)
Employment system, year
West Germany 1997	0.72*	(0.09)	0.99	(0.13)	0.38***	(0.05)
West Germany 2005	0.71*	(0.10)	0.79	(0.11)	0.57***	(0.08)
West Germany 2015	1.31*	(0.17)	1.37*	(0.18)	1.02	(0.13)
East Germany 1997	0.15***	(0.02)	0.40***	(0.06)	0.26***	(0.04)
East Germany 2005	0.27***	(0.04)	0.55***	(0.09)	0.67**	(0.10)
East Germany 2015 (Ref.)	1.00	(.)	1.00	(.)	1.00	(.)
Czech Republic 1997	0.37***	(0.05)	0.41***	(0.06)	0.27***	(0.04)
Czech Republic 2005	0.29***	(0.04)	0.70**	(0.09)	0.32***	(0.04)
Czech Republic 2015	0.54***	(0.07)	0.82	(0.11)	0.44***	(0.06)
Hungary 1997	0.26***	(0.04)	0.36***	(0.05)	0.25***	(0.03)
Hungary 2005	0.38***	(0.05)	0.51***	(0.07)	0.35***	(0.05)
Hungary 2015	0.43***	(0.06)	0.60***	(0.08)	0.44***	(0.06)
Poland 1997	0.36***	(0.05)	0.28***	(0.04)	0.30***	(0.04)
Poland 2015	0.21***	(0.03)	0.41***	(0.05)	0.34***	(0.04)
Control variables
Age	1.01**	(0.00)	1.00*	(0.00)	0.97***	(0.00)
Sex: Female	1.00	(0.05)	0.56***	(0.03)	0.65***	(0.03)
Self-employed: Yes	1.01	(0.07)	1.24**	(0.09)	1.05	(0.08)
Working hours	1.00*	(0.00)	1.02***	(0.00)	1.02***	(0.00)
Union member: Yes	1.09	(0.07)	1.10	(0.07)	1.13*	(0.07)
Skill: Low, white-collar	0.71***	(0.04)	0.48***	(0.03)	0.66***	(0.04)
Skill: High, blue-collar	0.73***	(0.04)	0.38***	(0.02)	0.45***	(0.03)
Skill: Low, blue-collar	0.59***	(0.04)	0.31***	(0.02)	0.33***	(0.02)
Model parameters
N	7,074		7,162		7,007
Pseudo R²	0.04		0.06		0.05

Source: International Social Survey Programme (ISSP) data from 1997, 2005, 2015.

Notes: Excludes cases from 1989. Ref. Skill: high, white-collar. OR, odds ratio; SE, standard error; Ref., reference category.

Statistically significant at the p < .05 level; ** at the p < .01 level; *** at the p < .001 level.

Table 5.

Regression Models II: Ordered Logit and Logit Regressions (Odds Ratio Reported)

Model: Variable	4: Supervisory role (logit)		5: Interesting work		6: Independent work
	OR	(SE)	OR	(SE)	OR	(SE)
Employment system, year
West Germany 1997	1.22	(0.18)	0.63***	(0.08)	0.66**	(0.09)
West Germany 2005	1.55**	(0.24)	0.88	(0.12)	0.79	(0.11)
West Germany 2015	1.28	(0.19)	0.86	(0.12)	0.99	(0.14)
East Germany 1997	0.96	(0.17)	0.54***	(0.09)	0.50***	(0.08)
East Germany 2005	0.91	(0.17)	0.92	(0.15)	0.76	(0.13)
East Germany 2015 (Ref.)	1.00	(.)	1.00	(.)	1.00	(.)
Czech Republic 1997	0.57**	(0.10)	0.31***	(0.05)	0.33***	(0.05)
Czech Republic 2005	0.41***	(0.07)	0.23***	(0.03)	0.26***	(0.04)
Czech Republic 2015	0.37***	(0.06)	0.34***	(0.05)	0.37***	(0.05)
Hungary 1997	0.20***	(0.03)	0.25***	(0.03)	0.32***	(0.05)
Hungary 2005	0.18***	(0.04)	0.26***	(0.04)	0.29***	(0.04)
Hungary 2015	0.06***	(0.01)	0.21***	(0.03)	0.20***	(0.03)
Poland 1997	0.52***	(0.08)	0.20***	(0.03)	0.07***	(0.01)
Poland 2015	0.38***	(0.06)	0.15***	(0.02)	0.06***	(0.01)
Control variables
Age	1.02***	(0.00)	1.00	(0.00)	1.01***	(0.00)
Sex: Female	0.60***	(0.04)	0.90*	(0.05)	1.01	(0.05)
Self-employed: Yes	0.93	(0.09)	1.86***	(0.14)	6.16***	(0.49)
Working hours	1.03***	(0.00)	1.01***	(0.00)	1.01***	(0.00)
Union member: Yes	1.06	(0.08)	1.25***	(0.08)	0.95	(0.06)
Skill: Low, white-collar	0.47***	(0.04)	0.44***	(0.03)	0.60***	(0.04)
Skill: High, blue-collar	0.36***	(0.03)	0.34***	(0.02)	0.68***	(0.04)
Skill: Low, blue-collar	0.19***	(0.02)	0.19***	(0.01)	0.51***	(0.04)
Model parameters
N	7,270		7,191		7,181
Pseudo R²	0.17		0.09		0.11

Source: International Social Survey Programme (ISSP) data from 1997, 2005, 2015.

Notes: Excludes cases from 1989. Ref. Skill: high, white-collar. OR, odds ratio; SE, standard error; Ref., reference category.

Statistically significant at the p < .05 level; ** at the p < .01 level; *** at the p < .001 level.

Odds ratios denote the change of the dependent variable for a one-unit change in the independent variable. These odds ratios represent that the chances are proportional odds times larger when the independent variable changes by one unit—comparing cases with higher values on the dependent variable (higher category) to cases with equal or lower values of the dependent variable (lower or equal category) (see Long and Freese 2006). Note that odds ratios less than 1 indicate negative associations between the dependent and the independent variable, whereas odds ratios greater than 1 represent positive associations. In all models, respondents from East Germany in 2015 serve as the reference category for the employment systems over time, taking on the value of 1.

First, I consider the element of employment conditions (two top graphs in Figure 1, and Table 4). In early survey years, East German employment conditions repeatedly scored much closer to the CEE employment systems than to the West German employment system. This outcome changed dramatically by 2015. In 1997, the chances for a higher category of job security (see model 1 in Table 4) in West Germany (OR: 0.72) and Hungary (OR: 0.26) exceeded the odds ratio for East German respondents (OR: 0.15). In 2015, East Germany had closed this large gap in job security, approaching convergence with an increased West German level (OR: 1.31) and opening a gap to a slightly risen Hungarian level (OR: 0.43). High income (see model 2 in Table 4) exhibits a similar overall trend. After a period of substantial divide in 1997 between East (OR: 0.40) and West Germany (OR: 0.99), in 2015 the East German level approached convergence with a risen West German level (OR: 1.37). The Hungarian level also rose slightly from 1997 (OR: 0.36) to 2015 (OR: 0.60), yet Hungary scores lower every time when compared to East Germany.

Second, I turn to advancement opportunities (two middle graphs in Figure 1, and Tables 4 and 5). From 2005 on, East Germany differed substantially from all three CEE cases on both variables, while exhibiting highly similar levels to West Germany. Career opportunity (see model 3 in Table 4) in East Germany follows a dynamic that is comparable to the employment conditions variables. East Germany rises from a low value in 1997 (OR: 0.26) to be on a par with the West German level (OR: 1.02) in 2015. This trend closes a substantial gap with West Germany. This trend also sets East Germany apart from an initially similar Hungarian level in 1997 (OR: 0.25) to later an only slightly risen Hungarian level in 2015 (OR: 0.44). For acting in a supervisory role (see model 4 in Table 5), East Germany showed only minor differences to the West. Simultaneously, the East German level continuously exceeded the Hungarian level in 1997 (OR: 0.20), also including a decreased Hungarian level in 2015 (OR: 0.06).

Third, I consider the results for the job design dimension (bottom two graphs in Figure 1, and Table 5). Here, East and West Germany showed little discrepancy, as they began to develop along similar levels from 1997. The steadily increasing levels in both parts of Germany substantially departed from the continuously lower levels in the three CEE employment systems. For example, interesting work (see model 5 in Table 5) in Hungary scores much lower in 1997 (OR: 0.25) and declines slightly to an even lower level in 2015 (OR: 0.21).

My results reveal a general trend of convergence in East Germany’s system toward West German levels by 2015. Other than two substantially decreased, yet still noticeable differences (p > 0.05) in job security⁸ and high income, East German levels exhibited no statistically significant differences to West Germany in 2015. Considering the trends in West Germany between 1989 and 2015, Figure 1 reveals a dramatic trajectory of decline and recovery for job security, high income, and career opportunities as well as a slight upward trend for interesting work and independent work.

Conversely, the results in 2015 underline highly significant differences between East Germany and the three CEE employment systems (with the exception of high income in the Czech Republic). Most of the differences increase substantially between 1997 and 2015, clearly setting East Germany apart from its Eastern European neighbors.

Discussion and Conclusion

I have investigated working conditions in East Germany. Extant research provides arguments for three opposing logics for East Germany’s employment system: First, East Germany resembles West Germany in working conditions in a reunified logic; second, East Germany joins its CEE neighbors in a workbench logic; and third, East Germany follows its own path along a survivalist logic. To reveal its distinct properties, I compared East Germany’s employment system empirically, over time, with those of West Germany, the Czech Republic, Hungary, and Poland.

My results underline that the transformational properties of the East German employment system require a dynamic empirical approach. Extending perspectives that view employment systems in static categories, my dynamic perspective reveals that the East German employment system progresses from a survivalist logic to approach a reunified logic. My results also clearly denote that East Germany never fully coincided with working conditions in CEE employment systems. In terms of job design, East Germany always conformed more to West Germany. This finding rules out a straightforward workbench logic and supports assumptions that working conditions in East Germany initially did not differ so greatly from those in West Germany, as is often suggested (Sorge 1993), and instead reflect a flexible job design with shared responsibilities (Buss and Wittke 2005). However, the substantial difference in employment conditions and career opportunities in 1997 suggests a substantial fit with the survivalist logic in early periods. The survivalist logic, visible in 1997, gradually approached convergence with a reunified logic, as most conditions in East Germany align with West German levels by 2015. Thus, while my results indicate a general applicability of the logics perspective, it is important to consider that logics can and do change over time—especially in transformation cases such as East Germany.

My results also clarify established assumptions that suggest a regional diversity and various scenarios regarding how the East German employment system would develop. For a period in the 1990s and early 2000s, my results confirm the positions of those who identified a regional diversity within Germany’s economy. This divergent, survivalist logic of East Germany’s employment system was characterized by a job design similar to that of West Germany but it was paired with lower levels of job security, income, and career opportunities. This finding supports case study evidence that suggested an alternative East German path (Buss and Wittke 2005) and assumed substantial regional diversity within Germany’s economy (Crouch et al. 2009). Thus, my results contradict other scenarios of early investigations (Windolf 1996) that suggested a transformation along a general workbench logic. In later periods, however, East and West German conditions nearly converge, almost transforming the survivalist logic into a reunified logic by 2015. Here, the scenario of an alternative path gradually dissolves into a scenario of approaching convergence. Building on my findings, I conclude that substantial regional diversity did exist, but has now nearly disappeared. This conclusion bears important implications for cross-national comparisons: Assuming a general tendency toward a unified logic for East and West Germany may have been incorrect in previous general international comparisons. Although some differences remain, my results suggest that such an assumption can now reasonably be made.

Besides East Germany’s specific development, my empirical results also reveal several general dynamics among the employment systems observed: Most notably, West Germany’s employment system underwent a dramatic recovery dynamic exhibiting a steep decline between 1989 and 2005, followed by a swift recovery by 2015. This recovery dynamic pertains to job security, high income, and career opportunities and reflects the tumultuous shifts of the West German model starting in the 1990s. In this case, West Germany’s employment system exhibits a cyclical trajectory of working conditions in a situation of tremendous economic and institutional change. After a period of painful decline, West Germany’s employment system returned to previous conditions and restored its logic. Here, the well-established narrative of disruption and erosion of the German model (Streeck 1997; Bosch et al. 2007) needs to be revisited. The dynamics also reveal a certain elasticity of employment system logics. The considerable fluctuation of key elements suggests that actors temporarily departed from a traditional logic of appropriateness. The transformation and substantial reconfiguration of the traditional West German model ultimately may turn out to be an effort to recover its underlying logic in times of change.

The employment systems in the Czech Republic, Hungary, and Poland tend to perform lower overall in terms of employment conditions, career opportunities, and job design, in comparison to West Germany. From a West German perspective, the CEE employment systems exhibit a workbench logic. And though all three systems seem to follow common trends, the countries’ systems clearly differ. The Czech Republic shows working conditions that come much closer to the higher West German levels than do the other two CEE countries. Poland exhibits conditions that depart most substantially from West German levels. Overall, my results do not indicate the existence of one coherent transitional model, but provide evidence of heterogeneous patterns within a general development trend. This heterogeneity could reflect the search for a viable model and adaptation processes in mixed market economies (Bosch et al. 2009).

My results pose general questions about how logics emerge and solidify in the long term. Fligstein (2001) initially developed the basic outlines of the employment system concept as an outcome of a lengthy historical process that forges an enduring compromise in selected countries: the United States, France, Germany, and Japan. However, he also conceived employment systems as subject to conflict, change, and perhaps failure: “Solving the problem of finding a stable social outcome is not simple or predestined. Indeed, institutionalization projects can end up in disaster as frequently as they do in success” (Fligstein and Byrkjeflot 1996: 14). Whereas some employment systems thrive on a solidified logic, others may exhibit temporary or fluctuating logics. The latter especially applies to countries in transition processes, in which emerging logics may prove much more contested, volatile, and situational.

In fact, the survivalist logic in East Germany appears very much contested, volatile, and situational. Here, actors essentially established an alternative logic of appropriateness in the face of the common German institutional framework, one that simply was not appropriate because it does not apply to East German conditions. This finding resonates with earlier case study evidence (Buss and Wittke 2005; Crouch et al. 2009), which indicated an alternative path for East Germany’s economy rather than taking on West German templates. It also aligns with investigations that found a particular East German psychological employment contract (Bernhardt and Krause 2014). In the case of East Germany, appropriateness could not derive from a long process of conflict and eventual compromise. This outcome points to alternative sources of logics of appropriateness, whereby actors compromise situationally. Thus, this situational logic emerged in particular circumstances that were defined by demands for immediate survival in the aftermath of a transformation shock.

My results on East Germany also indicate a progression toward a reunified logic in later periods, thus suggesting the immense gravitational pull of the West German logic. This process may have two major sources. First, the survivalist logic might represent a temporarily appropriate answer to situational demands that call for a resolution in the future. Thus, the gravitation to West Germany may derive from a reunified logic of appropriateness, which was only temporarily suspended by adverse conditions in East Germany. Second, consider the major efforts the German state made to provide equal working conditions in East and West Germany. In this sense, the German state may have induced a reunified logic in the East. Several institutional and economic forces might have played to the advantage of a reunified logic. In particular, the recovery of the German economy in the 2000s and after the financial crisis in 2008 might have provided opportunities to close extant gaps in favor of East German employees; however, such conditions have not yet fully converged. Therefore, one could also assume that particular properties of the German institutional framework might still maintain persisting differences (e.g., wage setting systems).

By contrast, considering the CEE employment systems, a separate relationship emerges between logics and transition processes. Here, the logic builds on an agreement that was struck between state and powerful employers and that was subsequently more or less forced on employees (Nölke and Vliegenthart 2009). Faced with the challenges of transition, employees had to accept demands made especially by dominant transnational companies, such as comparatively low-cost production, “acceptable” job security, and comparatively low wages. The relatively weak industrial relations systems could not effectively represent labor interests in this process. Although the elements of a workbench logic may manifest as practically appropriate, they do not reflect the outcome of a proper compromise between the actors involved in a Fligsteinian sense.

This outcome again points to alternative sources of dominant logics of appropriateness in transition processes. Here, the logics of appropriateness derive from a situation whereby actors have been forced to compromise. In fact, this may describe the core of these employment systems, as they seem to be inclined to fundamental conflict. Many scholars highlight the problematic nature of workplace relations in CEE societies. For instance, Meardi (2007, 2012) and, similarly, Ost (2005), argued that limited voice led to increased exit through labor migration and political abstention or a turn toward populism. The inadequate involvement of labor in the process left workers with a feeling of betrayal. Thus, labor migration and populism may represent important alternative mechanisms for labor to counter an established logic and reshape it by inflicting labor shortages, retention problems, and political shifts.

Of note, although logics in East Germany differed from those in its CEE neighbors, East Germany exhibited similar exit tendencies. A massive labor migration from East to West Germany took place (Bundeszentrale für Politische Bildung 2016), especially in the early years under the survivalist logic. This factor may represent a third source of the gravitational pull of the West German logic. East Germany’s workforce could threaten to vote with their feet for the West German logic over an East German alternative. More recently, East Germany has become a stronghold of rising populism (Lengfeld 2017). Among other post-transitional developments, this might constitute long-term effects of an incomplete compromise of the employment systems in East Germany and in its CEE neighbors.

This study bears several limitations: I have focused on specific employment systems and selected key elements. Further studies should investigate other employment systems and include additional elements to test the viability of the developed approach for other examples. My study does not comprise direct evidence of the micro-processes of establishing appropriateness or compromise nor the processes whereby institutional properties shape working conditions. To address these issues, researchers should integrate repeated qualitative case studies and quantitative surveys to uncover the underlying mechanisms. Regarding job security, it is not possible to consistently include additional data on regional unemployment rates across time. Other studies (Bernhardt and Krause 2014) that have included regional unemployment rates compared job insecurity in East and West Germany in 2006 and still reported overall East–West differences. It is reasonable to assume, however, that some part of the perceived job insecurity stems from the actually experienced unemployment rates and the ability of the employment systems to provide jobs.

Finally, my approach focused on dominant logics and thus did not engage with alternative models that could very well be present in a given employment system. For institutional arguments, it seems important not to apply institutional concepts deterministically. Dominant logics do not rule out the existence of alternative logics within the same national economy (Crouch 2005). Instead, institutional research should be seen in part as an approach that examines the probability of working conditions, since employees and firms can and do diverge from general templates. Institutional research reveals an average tendency consisting of dominant patterns that emerge from general distributions in the face of omnipresent empirical diversity. Future empirical research should seek to reconcile dominant and alternative logics by allowing research designs to capture conditions of conformity as well as divergence within national economies.

Overall, the vast institutional experiment of East Germany’s transition can inform scholars about the ways institutional properties govern working conditions. This article has contributed to the literature by empirically investigating, from a comparative perspective, the unique dynamics that underlie East Germany’s transformation. After all, the example of East Germany’s employment system also shows how West Germany’s formal institutional framework interacts with the practical challenges in a particular historical situation of a regional economy. Although it was difficult to see the dominant patterns in employment systems during the immediate transition period, 25 years after Germany’s reunification, one could begin to recognize which patterns were actually emerging.

Supplemental Material

DS_10.1177_0019793919831694 – Supplemental material for Between East and West? East Germany’s Employment System in a Dynamic Comparison

Supplemental material, DS_10.1177_0019793919831694 for Between East and West? East Germany’s Employment System in a Dynamic Comparison by Stefan Kirchner in ILR Review

Footnotes

An Online Appendix is available at .

For information regarding the data and/or computer programs used for this study, please address correspondence to the author at stefan.kirchner@tu-berlin.de.

Notes

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