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Regional Income Stratification in Unified Germany Using a Gini Decomposition Approach

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  • Frick, Joachim R.

    (DIW Berlin)

  • Goebel, Jan

    () (DIW Berlin)

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.

Suggested Citation

  • Frick, Joachim R. & Goebel, Jan, 2005. "Regional Income Stratification in Unified Germany Using a Gini Decomposition Approach," IZA Discussion Papers 1891, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp1891
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    Cited by:

    1. 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.
    2. Rainer, Helmut & Siedler, Thomas, 2009. "Does democracy foster trust?," Journal of Comparative Economics, Elsevier, vol. 37(2), pages 251-269, June.
    3. 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.
    4. Shlomo Yitzhaki & Edna Schechtman, 2009. "The “melting pot”: A success story?," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 7(2), pages 137-151, June.
    5. Ruoff, Bea., 2016. "Labour market developments in Germany : tales of decency and stability," ILO Working Papers 994899913402676, International Labour Organization.
    6. Giovanni Maria Giorgi & Alessio Guandalini, 2016. "Bonferroni Index Decomposition And The Shapley Method," RIEDS - Rivista Italiana di Economia, Demografia e Statistica - Italian Review of Economics, Demography and Statistics, SIEDS Societa' Italiana di Economia Demografia e Statistica, vol. 70(4), pages 67-78, October-D.
    7. 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.
    8. Robbert Maseland, 2014. "Does Germany have an East-West Problem? Regional Growth Patterns in Germany since Reunification," Regional Studies, Taylor & Francis Journals, vol. 48(7), pages 1161-1175, July.
    9. 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).
    10. 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].
    11. Andreas Peichl & Nico Pestel & Hilmar Schneider, 2012. "Does Size Matter? The Impact Of Changes In Household Structure On Income Distribution In Germany," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 58(1), pages 118-141, March.
    12. Gertrudes Saúde Guerreiro, 2012. "Regional Income Distribution in Portugal," CEFAGE-UE Working Papers 2012_06, University of Evora, CEFAGE-UE (Portugal).
    13. Sander Wagner, 2017. "Children of the Reunification: Gendered Effects on Intergenerational Mobility in Germany," Working Papers 2017-03, Center for Research in Economics and Statistics.

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    Keywords

    regional disparities; SOEP; German unification; stratification; Gini; inequality decomposition;

    JEL classification:

    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • 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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