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Regional Income Stratification in Unified Germany Using a Gini Decomposition Approach

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  • Joachim Frick
  • Jan Goebel

Abstract

Frick J. R. and Goebel J. Regional income stratification in unified Germany using a Gini decomposition approach, Regional Studies. Using representative micro data from the German Socio-Economic Panel Study (SOEP), this paper delivers new insights into the development of income inequality and regional stratification in Germany after unification. This paper applies a new method for detecting social stratification by a decomposition of the Gini index that yields the obligatory between- and within-group components as well as an 'overlapping' index for the different sub-populations. It is found that East Germany is still a stratum on its own when using post-government income, but since 2001 no longer is when using pre-government income. These results remain stable when using alternatively defined regional classifications. However, there are also indications of some regional variation within West Germany. [image omitted] Frick J. R. et Goebel J. Les tranches de revenu regional dans l'Allemagne unifiee employant une decomposition Gini, Regional Studies. A partir des donnees microeconomiques provenant de la Socio-Economic Panel Study (SOEP - enquete permanente socio-economique) menee en Allemagne, cet article cherche a fournir de nouvelles perspectives sur le developpement des inegalites de salaire et des tranches de revenu regional en Allemagne au lendemain de l'unification. On applique une nouvelle methode qui permet de deceler les couches sociales par la decomposition de l'indice Gini qui fournit les necessairs elements intragroupe et intergroupe ainsi qu'une indice “chevauchante” pour les differentes sous-categories de la population. A partir de la dotation globale de fonctionnement, il s'avere que l'est de l'Allemagne reste toujours une couche a part entiere mais, depuis 2001, il ne l'est plus quand on considere les ressources propres. A partir d'autres classements regionaux, ces resultats restent inchanges. Cependant, il s'avere une certaine variation regionale dans l'est de l'Allemagne. Inegalite Decomposition Gini Tranches Unification allemande Ecarts regionaux SOEP Frick J. R. und Goebel J. Regionale Einkommeusstratifizietung im wiedervereinigten Deutschland mit Hilfe eines Gini-Dekompositionsansatzes, Regional Studies. Mit Hilfe reprasentativer Mikrodaten des soziookonomischen Panels fur Deutschland (SOEP) werden in diesem Beitrag neue Einblicke in das Entstehen eines Einkommensungleichgewichts und einer regionalen Stratifizierung in Deutschland nach der Wiedervereinigung geliefert. Wir nutzen eine neue Methode zur Erkennung von sozialer Stratifizierung mit Hilfe einer Dekomposition des GINI-Indexes, was zu den obligatorischen Komponenten zwischen und innerhalb von Gruppen sowie zu einem, uberlappunge-Index fur die verschiedenen Subpopulationen fuhrt. Nach unseren Ergebnissen stellt Ostdeutschland weiterhin eine eigenstandige Schicht dar, wenn man vom Einkommen unter Berucksichtigung aller staatlichen Transfers ('post-government income') ausgeht, hingegen seit 2001 nicht mehr, wenn man das Einkommen ohne diese Transfers ('pre-government income') untersucht. Diese Ergebnisse bleiben auch bei Verwendung unterschiedlich definierter regionaler Klassifikationen stabil. Allerdings gibt es auch innerhalb von Westdeutschland Anzeichen einer gewissen regionalen variation. Dekomposition von Ungleichgewicht Gini Stratifikation Deutsche Wiedervereinigung Regionale Disparitaten SOEP Frick J. R. y Goebel J. Estratificacion de ingresos regionales en la Alemania unificada usando un enfoque de descomposicion del indice Gini, Regional Studies. Con ayuda de micro datos representativos de un estudio de panel socioeconomico aleman, en este articulo aportamos nuevas perspectivas sobre el desarrollo de desigualdades de ingresos y estratificacion regional en Alemania tras la unificacion. Empleamos un nuevo metodo para detectar la estratificacion social mediante una descomposicion del indice GINI que produce los componentes obligatorios entre y dentro de los grupos asi como un indice de 'solapamiento' para las diferentes subpoblaciones. Al analizar los ingresos posgubernamentales observamos que Alemania del este es todavia un estrato en si pero deja de serlo a partir de 2001 si estudiamos los ingresos pregubernamentales. Estos resultados siguen siendo estables al utilizar clasificaciones regionales definidas de forma alternativa. Sin embargo, tambien hay indicios de cierta variacion regional dentro de Alemania del oeste. Descomposicion de las desigualdades Gini Estratificacion Alemania unificada Disparidades regionales Panel socioeconomico aleman

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Regional Studies.

Volume (Year): 42 (2008)
Issue (Month): 4 ()
Pages: 555-577

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Handle: RePEc:taf:regstd:v:42:y:2008:i:4:p:555-577

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Keywords: C81; D31; D63;

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  1. Roberta Colavecchio & Declan Curran & Michael Funke, 2005. "Drifting Together or Falling Apart? The Empirics of Regional Economic Growth in Post-Unification Germany," Quantitative Macroeconomics Working Papers 20509, Hamburg University, Department of Economics.
  2. Grabka, Markus M. & Schwarze, Johannes & Wagner, Gert G., 1999. "How Unification and Immigration Affected the German Income Distribution," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 867-878.
  3. Joachim R. Frick & Jan Goebel & Markus M. Grabka, 2005. "Zur langfristigen Entwicklung von Einkommen und Armut in Deutschland: starke Reduktion der arbeitsmarktbedingten Ungleichheit durch sozialstaatliche Maßnahmen," DIW Wochenbericht, DIW Berlin, German Institute for Economic Research, vol. 72(4), pages 59-68.
  4. Frick, Joachim R. & Goebel, Jan & Schechtman, Edna & Wagner, Gert G. & Yitzhaki, Shlomo, 2004. "Using Analysis of Gini (ANoGi) for Detecting Whether Two Sub-Samples Represent the Same Universe: The SOEP Experience," IZA Discussion Papers 1049, Institute for the Study of Labor (IZA).
  5. Schechtman, E. & Yitzhaki, S., 1999. "On the proper bounds of the Gini correlation," Economics Letters, Elsevier, vol. 63(2), pages 133-138, May.
  6. Jan Goebel & Peter Krause & Jürgen Schupp, 2005. "Growth in Unemployment Raises Poverty Rates: Most Low-Wage Earnings Constitute Supplement to Primary Household Income," Weekly Report, DIW Berlin, German Institute for Economic Research, vol. 1(10), pages 115-122.
  7. Frick, Joachim R. & Grabka, Markus M., 2003. "Imputed Rent and Income Inequality: A Decomposition Analysis for Great Britain, West Germany and the U.S," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 513-537.
  8. Pyatt, Graham, 1976. "On the Interpretation and Disaggregation of Gini Coefficients," Economic Journal, Royal Economic Society, vol. 86(342), pages 243-55, June.
  9. Lerman, Robert I. & Yitzhaki, Shlomo, 1984. "A note on the calculation and interpretation of the Gini index," Economics Letters, Elsevier, vol. 15(3-4), pages 363-368.
  10. Kurt Geppert, 1999. "Süd-Nord-Gefälle eingeebnet?: Zur räumlichen Wirtschaftsentwicklung in Westdeutschland," DIW Wochenbericht, DIW Berlin, German Institute for Economic Research, vol. 66(3), pages 67-78.
  11. Lammers, Konrad, 2003. "Süd-Nord-Gefälle in West- und Ostdeutschland?," Wirtschaftsdienst – Zeitschrift für Wirtschaftspolitik (1998 - 2007), ZBW – German National Library of Economics / Leibniz Information Centre for Economics, vol. 83(11), pages 736-739.
  12. Forster, Michael & Jesuit, David & Smeeding, Timothy, 2003. "Regional Poverty and Income Inequality in Central and Eastern Europe: Evidence from the Luxembourg Income Study," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  13. Hunt, Jennifer, 1999. "Post-Unification Wage Growth in East Germany," CEPR Discussion Papers 2106, C.E.P.R. Discussion Papers.
  14. Yitzhaki, Shlomo & Lerman, Robert I, 1991. "Income Stratification and Income Inequality," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 37(3), pages 313-29, September.
  15. Martin Biewen, 2001. "Measuring the Effects of Socio-Economic Variables on the Income Distribution: An Application to the East German Transition Process," The Review of Economics and Statistics, MIT Press, vol. 83(1), pages 185-190, February.
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Cited by:
  1. Shlomo Yitzhaki & Edna Schechtman, 2009. "The “melting pot”: A success story?," Journal of Economic Inequality, Springer, vol. 7(2), pages 137-151, June.
  2. Gertrudes Saúde Guerreiro, 2012. "Regional Income Distribution in Portugal," CEFAGE-UE Working Papers 2012_06, University of Evora, CEFAGE-UE (Portugal).
  3. Rainer, Helmut & Siedler, Thomas, 2006. "Does Democracy Foster Trust?," IZA Discussion Papers 2154, Institute for the Study of Labor (IZA).
  4. Peichl, Andreas & Pestel, Nico & Schneider, Hilmar, 2010. "Does Size Matter? The Impact of Changes in Household Structure on Income Distribution in Germany," IZA Discussion Papers 4770, Institute for the Study of Labor (IZA).
  5. Paolo Liberati & Shlomo Yitzhaki, 2012. "GDP and beyond: an implementation of welfare considerations to the distribution of earnings in Italy," Departmental Working Papers of Economics - University 'Roma Tre' 0146, Department of Economics - University Roma Tre.
  6. Gerasimova, Irina, 2009. "Sources of Income as a Factor of Interregional Social Economic Differentiation of the Russia’s Population (1995-2007)," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 16(4), pages 60-84.
  7. Gundi Knies & C. Katharina Spieß, 2007. "Regional Data in the German Socio-Economic Panel Study (SOEP)," Data Documentation 17, DIW Berlin, German Institute for Economic Research.
  8. Denis Gerstorf & Nilam Ram & Jan Goebel & Jürgen Schupp & Ulman Lindenberger & Gert G. Wagner, 2010. "Where People Live and Die Makes a Difference: Individual and Geographic Disparities in Well-Being Progression at the End of Life," SOEPpapers on Multidisciplinary Panel Data Research 287, DIW Berlin, The German Socio-Economic Panel (SOEP).
  9. 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].

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