Authors: Sebastian Vollmer Hajo Holzmann Florian Ketterer Stephan Klasen
Publish Date: 2011/12/31
Volume: 44, Issue: 2, Pages: 491-509
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 twocomponent normal mixtures While in the first year after unification the twocomponent 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 EMtest 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 nonmover district which had the same initial level of GDP per employeeWe are grateful to two anonymous referees for valuable suggestions that considerably improved this paper We also gratefully acknowledge financial support from the German Research Foundation HO 3260/31 KL 1260/91 and VO 1592/31 the German Academic Exchange Service Vollmer the ClaussenSimon Stiftung Holzmann and the Landesstiftung BadenWürttemberg HolzmannThis article is published under an open access license Please check the Copyright Information section for details of this license and what reuse is permitted If your intended use exceeds what is permitted by the license or if you are unable to locate the licence and reuse information please contact the Rights and Permissions team
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