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

  • Schwarze, Johannes
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    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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    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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