The Gender Wage Gap and Discrimination,

East Germany has undergone rapid transition from a socialist to a market economy since the fall of the Berlin Wall. We are interested in whether women are better off or worse off relative to men as a result of this transition. We use the German Socio-Economic Panel Data 1990–1997 to study wage determination and we implement a decom-position analysis that accounts for selection bias issues. Our analysis shows that even though the gender wage gap is shrinking, gender discrimination is not. 1