Regional Income Inequality in Germany
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In this article, the authors provide new evidence on regional income inequality in Germany, using tabulated income tax statistics for the period 1998-2016. Other than related work on regional income inequality in Germany which analyzes income or wages at the county level, we can characterize inequality at the municipality level. As there currently exist 401 counties in Germany, but more than 10,000 municipalities, our analysis is conducted at a much more fine-grained level.
Key Messages
- We characterize regional inequality in gross incomes at the municipality level in Germany using data from administrative tax returns for the period 1998-2016
- More unequal municipalities are more likely to be urban and located in West Germany
- Decomposing the increase in inequality in the last two decades into a between and within municipality component, we find that the increase was entirely driven by growing inequality within municipalities
- Thirty years after reunification, Germany is a country with rather modest interregional inequalities but a growing level of intraregional inequality
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Citation
Immo Frieden, Andreas Peichl and Paul Schüle: “Regional Income Inequality in Germany,” EconPol Forum 24 (2), CESifo, Munich, 2023.