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Regional Inequality and Labour Productivity in Germany and the EU: What do the Data Tell us?

Author

Listed:
  • Martin Braml
  • Gabriel Felbermayr

Abstract

In ifo Schnelldienst 7/2018 the authors demonstrated that regional inequality in Germany and the EU, measured by the variance of GDP per inhabitant at the district level, has been decreasing since 2000. This article shows that the level of regional inequality is significantly lower when examining economic output per employee – a measure of labour productivity. The reason for this is that many people commute to districts with high GDP per inhabitant. The mobility of labour reduces regional inequality in two ways: First, by moves in and out of the district, mobility leads to a change in scarcity and equalises per capita income. Secondly, commuting from district to district means that regional production and consumption need not be congruent. Many districts benefit from production hubs in their immediate vicinity that workers can commute to without having to reside there. Spatial inequality, measured by this metric, is clearly declining in Germany.

Suggested Citation

  • Martin Braml & Gabriel Felbermayr, 2018. "Regional Inequality and Labour Productivity in Germany and the EU: What do the Data Tell us?," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 71(10), pages 26-31, May.
    • Handle: RePEc:ces:ifosdt:v:71:y:2018:i:10:p:26-31
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    File URL: https://www.ifo.de/DocDL/sd-2018-10-braml-felbermayr-ungleichheit-arbeitsproduktivitaet-2018-05-24.pdf
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    Citations

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    Cited by:

    1. Clemens Fuest, 2018. "Social Market Economy: Export Hit or Obsolete Model?," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 71(21), pages 35-45, November.
    2. Lea Immel & Andreas Peichl, 2020. "Regional Inequality in Germany: Where Do the Rich Live and Where Do the Poor Live?," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 73(05), pages 43-47, May.
    3. Mona Förtsch & Felix Rösel, 2020. "Hotspots everywhere: Corona Wanders into the Area," ifo Dresden berichtet, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 27(05), pages 07-09, September.
    4. David Bauer, 2021. "EU Structural Funds: How Regional Growth and Modified Rules Affect the Funding Landscape," ifo Dresden berichtet, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 28(01), pages 28-32, February.
    5. Clemens Fuest & Lea Immel, 2019. "Ein zunehmend gespaltenes Land? – Regionale Einkommensunterschiede und die Entwicklung des Gefälles zwischen Stadt und Land sowie West- und Ostdeutschland," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 72(16), pages 19-28, August.
    6. Dirk Konietzka & Yevgeniy Martynovych, 2023. "The Spatial Dimension of Social Stratification in Germany—Are Social Class Differentials in Place of Residence Increasing?," Social Sciences, MDPI, vol. 12(6), pages 1-18, May.
    7. Heike Belitz & Alexander Schiersch & Torben Stühmeier, 2019. "Produktivitätsentwicklung: Potenziale in Stadt und Land [Regional and Sectoral Disparities in Germany]," Wirtschaftsdienst, Springer;ZBW - Leibniz Information Centre for Economics, vol. 99(5), pages 355-358, May.

    More about this item

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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