IDEAS home Printed from https://ideas.repec.org/a/sae/urbstu/v55y2018i4p790-806.html
   My bibliography  Save this article

Deindustrialisation and the polarisation of household incomes: The example of urban agglomerations in Germany

Author

Listed:
  • Martin Gornig

    (German Institute for Economic Research (DIW Berlin), Germany)

  • Jan Goebel

    (German Institute for Economic Research (DIW Berlin), Germany)

Abstract

The tertiarisation, or perhaps more accurately, the deindustrialisation of the economy has left deep scars on cities. It is evident not only in the industrial wastelands and empty factory buildings, but also in the income and social structures of cities. Industrialisation, collective wage setting, and the welfare state led to a stark reduction in income differences over the course of the 20th century. Conversely, deindustrialisation and the shift to tertiary sectors could result in increasing wage differentiation. Moreover, numerous studies on global cities, the dual city, and divided cities have also identified income polarisation as a central phenomenon in the development of major cities. Using data from the German Socio-Economic Panel (SOEP), we find an increasing polarisation of household income structures since the mid-1990s. In urban agglomerations, this income polarisation is even more pronounced than in the more rural regions. The income polarisation in Germany is likely to have multiple causes, some of which are directly linked to policies such as the deregulation of the labour market. But extensive deindustrialisation is probably also one of the drivers of this process, and it has directly weakened Germany’s middle-income groups.

Suggested Citation

  • Martin Gornig & Jan Goebel, 2018. "Deindustrialisation and the polarisation of household incomes: The example of urban agglomerations in Germany," Urban Studies, Urban Studies Journal Limited, vol. 55(4), pages 790-806, March.
  • Handle: RePEc:sae:urbstu:v:55:y:2018:i:4:p:790-806
    as

    Download full text from publisher

    File URL: http://usj.sagepub.com/content/55/4/790.abstract
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Norton, R D, 1986. "Industrial Policy and American Renewal," Journal of Economic Literature, American Economic Association, vol. 24(1), pages 1-40, March.
    2. David H. Autor & David Dorn, 2013. "The Growth of Low-Skill Service Jobs and the Polarization of the US Labor Market," American Economic Review, American Economic Association, vol. 103(5), pages 1553-1597, August.
    3. Esteban, Joan & Ray, Debraj, 1994. "On the Measurement of Polarization," Econometrica, Econometric Society, vol. 62(4), pages 819-851, July.
    4. Jan Goebel & Martin Gornig & Hartmut Häußermann, 2010. "Income Polarisation in Germany Is Rising," Weekly Report, DIW Berlin, German Institute for Economic Research, vol. 6(26), pages 199-206.
    5. Jan Eeckhout & Roberto Pinheiro & Kurt Schmidheiny, 2014. "Spatial Sorting," Journal of Political Economy, University of Chicago Press, vol. 122(3), pages 554-620.
    6. Wolfson, Michael C, 1994. "When Inequalities Diverge," American Economic Review, American Economic Association, vol. 84(2), pages 353-358, May.
    7. Wolfson, Michael, 1997. "Divergent Inequalities - Theory and Empirical Results (Revised Edition)," Analytical Studies Branch Research Paper Series 1997066e, Statistics Canada, Analytical Studies Branch.
    8. Dauth, Wolfgang, 2014. "Job polarization on local labor markets," IAB Discussion Paper 201418, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    9. Martin Biewen & Andos Juhasz, 2012. "Understanding Rising Income Inequality in Germany, 1999/2000–2005/2006," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 58(4), pages 622-647, December.
    10. Markus M. Grabka & Jan Goebel, 2014. "Reduction in Income Inequality Faltering," DIW Economic Bulletin, DIW Berlin, German Institute for Economic Research, vol. 4(1), pages 16-25.
    11. William B. Beyers, 2005. "Services and the changing economic base of regions in the united states," The Service Industries Journal, Taylor & Francis Journals, vol. 25(4), pages 461-476, June.
    12. Frick, Joachim R. & Goebel, Jan & Schechtman, Edna & Wagner, Gert G. & Yitzhaki, Shlomo, 2006. "Using Analysis of Gini (ANOGI) for Detecting Whether Two Subsamples Represent the Same Universe: The German Socio-Economic Panel Study (SOEP) Experience," EconStor Open Access Articles, ZBW - Leibniz Information Centre for Economics, pages 427-468.
    13. Chiara Gigliarano & Karl Mosler, 2009. "Constructing indices of multivariate polarization," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 7(4), pages 435-460, December.
    14. Sven Illeris, 2005. "The role of services in regional and urban development: A reappraisal of our understanding," The Service Industries Journal, Taylor & Francis Journals, vol. 25(4), pages 447-460, June.
    15. Ilan Tojerow, 2008. "Inter-industry Wage Differentials, Rent Sharing and Gender in Belgium," ULB Institutional Repository 2013/8789, ULB -- Universite Libre de Bruxelles.
    16. repec:zbw:espost:162546 is not listed on IDEAS
    17. François Rycx & Ilan Tojerow, 2007. "Inter-Industry Wage Differentials: What Do We Know?," Reflets et perspectives de la vie économique, De Boeck Université, vol. 0(2), pages 13-22.
    18. Wolfson, Michael C, 1997. "Divergent Inequalities: Theory and Empirical Results," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 43(4), pages 401-421, December.
    19. Andreas Stich, 1999. "On Rich Cities and Boring Places," Urban Studies, Urban Studies Journal Limited, vol. 36(10), pages 1649-1660, September.
    20. Terje Wessel, 2000. "Social Polarisation and Socioeconomic Segregation in a Welfare State: The Case of Oslo," Urban Studies, Urban Studies Journal Limited, vol. 37(11), pages 1947-1967, October.
    21. Gert G. Wagner & Joachim R. Frick & Jürgen Schupp, 2007. "The German Socio-Economic Panel Study (SOEP) – Scope, Evolution and Enhancements," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 127(1), pages 139-169.
    22. Jack Burgers, 2002. "Understanding Urban Inequality: A Model Based on Existing Theories and an Empirical Illustration," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 26(2), pages 403-413, June.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    cities; deindustrialisation; Germany; household income; inequality; polarisation; urban;

    JEL classification:

    • R20 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - General
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:urbstu:v:55:y:2018:i:4:p:790-806. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (SAGE Publications). General contact details of provider: http://www.gla.ac.uk/departments/urbanstudiesjournal .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.