Distribution Dynamics of Regional GDP per Employee in Unifi ed Germany
AbstractWe investigate to what extent convergence in production levels per worker has been achieved in Germany since unification. To this end, we model the distribution of GDP per employee across German districts using two-component normal mixtures. While in the first year after unification, the two component distributions were clearly separated and bimodal, corresponding to the East and West German districts, respectively, in the following years they started to merge showing only one mode. Still, using the recently developed EM-Test for homogeneity in normal mixtures,the hypothesis of just a single normal component for the whole distribution is clearly rejected for all years. A Posterior analysis shows that about half of the East German districts were assigned to the richer component in 2006, thus catching up to levels of the West. The growth rate of a mover district is about one percentage point higher than the growth rate of a non-mover district which had the same initial level of GDP per employee.
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Bibliographic InfoPaper provided by Courant Research Centre PEG in its series Courant Research Centre: Poverty, Equity and Growth - Discussion Papers with number 55.
Date of creation: 31 Dec 2010
Date of revision: 26 Sep 2011
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Regional convergence; distribution dynamics; mixture models; Germany; unification;
Other versions of this item:
- Sebastian Vollmer & Hajo Holzmann & Florian Ketterer & Stephan Klasen, 2013. "Distribution dynamics of regional GDP per employee in unified Germany," Empirical Economics, Springer, vol. 44(2), pages 491-509, April.
- Vollmer, Sebastian & Holzmann, Hajo & Ketterer, Florian & Klasen, Stephan, 2010. "Distribution Dynamics of Regional GDP per Employee in Unified Germany," Diskussionspapiere der Wirtschaftswissenschaftlichen FakultÃ¤t der Leibniz UniversitÃ¤t Hannover dp-461, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
- 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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