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How Income Inequality Changed in Germany following Reunification: An Empirical Analysis Using Decomposable Inequality Measures

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  • Schwarze, Johannes
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    Abstract

    This paper analyzes how inequality in before and after government income has changed in Germany since reunification using the 1990 through 1992 waves of the German Socio-Economic Panel. A Theil decomposable index is used to measure inequality in Germany and in its eastern and western states. Massive public transfers from west to east have narrowed the east-west income gap, substantially offset the rise in income inequality from private sources, and lowered overall inequality in the western states. The net result of this policy has been a drop in after government income inequality in Germany between 1990 and 1992. Copyright 1996 by The International Association for Research in Income and Wealth.

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    Bibliographic Info

    Article provided by International Association for Research in Income and Wealth in its journal Review of Income & Wealth.

    Volume (Year): 42 (1996)
    Issue (Month): 1 (March)
    Pages: 1-11

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    Handle: RePEc:bla:revinw:v:42:y:1996:i:1:p:1-11

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    Cited by:
    1. Hao Wei & Xi Wang & Chunming Zhao, 2012. "An analysis of the influences of scholars and their academic works in Chinese entrepreneurship field: Based on the CSSCI (2009-2010)," E3 Journal of Business Management and Economics., E3 Journals, vol. 3(5), pages 162-172.
    2. Dirk Krüger, 2009. "Inequality Trends for Germany in the Last Two Decades: A Tale of Two Countries," MEA discussion paper series 09184, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
    3. Grabka, Markus M. & Schwarze, Johannes & Wagner, Gert G., 1999. "How unification and immigration affected the German income distribution," European Economic Review, Elsevier, vol. 43(4-6), pages 867-878, April.
    4. Easterlin, Richard A., 2009. "Lost in transition: Life satisfaction on the road to capitalism," Journal of Economic Behavior & Organization, Elsevier, vol. 71(2), pages 130-145, August.
    5. Dekkers, G.J.M. & Nelissen, J.H.M., 2001. "The Components of Income Inequality in Belgium: Applying the Shorrocks-Decomposition with Bootstrapping," Discussion Paper 2001-66, Tilburg University, Center for Economic Research.
    6. Richard A. Easterlin & Anke C. Zimmermann, 2008. "Life Satisfaction and Economic Conditions in East and West Germany Pre- and Post-Unification," SOEPpapers on Multidisciplinary Panel Data Research 95, DIW Berlin, The German Socio-Economic Panel (SOEP).
    7. Bruckmeier, Kerstin & Schwengler, Barbara, 2009. "The impact of federal social policies on spatial income inequalities in Germany : empirical evidence from social security data," IAB Discussion Paper 200901, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    8. Jurgen Faik & Uwe Fachinger, 2013. "The decomposition of well-being categories: An application to Germany," Working Papers 307, ECINEQ, Society for the Study of Economic Inequality.
    9. Vazquez-Alvarez, R., 2001. "A Nonparametric Approach to the Sample Selection Problem in Survey Data," Open Access publications from Tilburg University urn:nbn:nl:ui:12-86303, Tilburg University.

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