Distribution dynamics of regional GDP per employee in unified Germany

Abstract

We 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 a third 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 1% point higher than the growth rate of a non-mover district which had the same initial level of GDP per employee.

A New Semiparametric Approach to Analysing Conditional Income Distributions

“…Also the rift of incomes between East and West for men without higher education has also narrowed. This convergence in mean incomes already pointed out by Vollmer et al (2013) and others. Especially for the older generations in the East the increase in income dispersion is dramatic.…”

“…Also the rift of incomes between East and West for men without higher education has also narrowed. This convergence in mean incomes already pointed out by Vollmer et al (2013) combined with a persistent high skewness again causing this group to show high within-inequality as indicated by the Theil index. With respect to the convergence of the whole income distribution (rather than just the mean) one has to concede that true convergence is still some way off.…”

“…While various authors have attempted to quantify the impact of the increasing wage-gap between the skill groups (Fitzenberger, 1999, e.g. ) and others have found convergence of mean incomes between East and West (Vollmer et al, 2013) it remains true that "we know relative little about the determinants of residual inequality" (Acemoglu, 2002). It is the aim of this paper to put residual inequality, or rather of conditional income distributions (CIDs), in the centre of the analysis.…”

The Distribution Dynamics of Human Development in Mexico 1990–2010

“…Vollmer et al . (2013b) focus on human development by studying the joint distribution of income, health and education across the countries of the world. They find that there were two clusters of countries in 1960, one with high levels in all three dimensions and one with lower levels in all three dimensions.…”

Regional State Aid Control in Europe: A Legal and Economic Assessment

“…Growth strategies based on increasing human capital investments and innovation capacities are considered by the authors the most likely successful strategies to trigger convergence. Vollmer et al (2013) find for the example of Germany some evidence of intra-State convergence post-unification. To some extent this fact is due to the dramatically different impact the protracted financial crisis has had on various Member States and the divergent economic success of Member States during the recovery phase post-2008.…”