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Regional Income Stratification in Unified Germany Using a Gini Decomposition Approach

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Author Info
Joachim R. Frick () (DIW Berlin, Berlin University of Technology (TUB) and IZA Bonn)
Jan Goebel () (DIW Berlin)

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Abstract

This paper delivers new insights into the development of income inequality and regional stratification in Germany after unification using a new method for detecting social stratification by a decomposition of the GINI index which yields the obligatory between- and within-group components as well as an "overlapping" index for the different sup-populations. We apply this method together with a jackknife estimation of standard errors. We find 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. Overall, these findings are important for the political discussion with respect to a potential regional concentration of future transfers from East to West Germany.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1891.

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Length: 35 pages
Date of creation: Dec 2005
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Handle: RePEc:iza:izadps:dp1891

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Related research
Keywords: inequality decomposition Gini stratification German unification regional disparities SOEP

Other versions of this item:

Find related papers by JEL classification:
C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Microeconomic Data
D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. 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. [Downloadable!] (restricted)
  2. Maria Grazia Pittau, 2005. "Fitting Regional Income Distributions in the European Union," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 67(2), pages 135-161, 04. [Downloadable!] (restricted)
  3. Yitzhaki, Shlomo & Lerman, Robert I, 1991. "Income Stratification and Income Inequality," Review of Income and Wealth, Blackwell Publishing, vol. 37(3), pages 313-29, September.
  4. 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. [Downloadable!] (restricted)
  5. Pyatt, Graham, 1976. "On the Interpretation and Disaggregation of Gini Coefficients," Economic Journal, Royal Economic Society, vol. 86(342), pages 243-55, June. [Downloadable!] (restricted)
  6. Yitzhaki, Shlomo, 1994. "Economic distance and overlapping of distributions," Journal of Econometrics, Elsevier, vol. 61(1), pages 147-159, March. [Downloadable!] (restricted)
  7. Joachim R. Frick & Markus M. Grabka, 2003. "Imputed Rent and Income Inequality: A Decomposition Analysis for Great Britain, West Germany and the U.S," Review of Income and Wealth, Blackwell Publishing, vol. 49(4), pages 513-537, December. [Downloadable!] (restricted)
  8. 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). [Downloadable!]
  9. John A. Bishop & John P. Formby & Lester A. Zeager, 2001. "The distributional impact of unification and the 1992-93 recession on West German households," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 9(2), pages 515-532, July. [Downloadable!] (restricted)
  10. 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. [Downloadable!]
  11. 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," Wochenbericht, DIW Berlin, German Institute for Economic Research, vol. 72(4), pages 59-68. [Downloadable!]
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. 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. [Downloadable!]
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