Labour mobility and disparities between regional labour markets in Germany

Differences in regional labour markets are still pronounced in Germany although the economic transformation of East Germany started almost two decades ago. GDP per capita in East Germany was 68% of the West German level in 2009. The unemployment rate in Easter Germany (13%) is nearly twice the rate in the Western part of the country.

But disparities are not only marked between West and East Germany, they exist also within the West Germany. For example Eichstätt, a county in the South of West Germany, shows an unemployment rate of 2.2% in 2009, whereas Bremerhaven in the North had 15,4 % unemployment that year.

Some theories imply that labour mobility should reduce such disparities. In contrast, other theories suggest that regional differences may well increase due to the interregional migration of workers. That´s why an investigation on the impact of labour mobility on regional disparities in Germany between 1995 and 2005 was conducted.

The survey findings suggest that there indeed exist significant effects of labour mobility on uneployment, whereas evidence with respect to regional wages is rather weak. Labour mobility seems to reduce regional disparities in unemployment. However, the results show that commuting is not so important for a reduction of labour market disparities in Germany. Significant effects of net commuting emerge only for the West German.

Source:

http://www.econstor.eu/dspace/bitstream/10419/37187/1/VfS_2010_pid_730.pdf

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2 thoughts on “Labour mobility and disparities between regional labour markets in Germany

  1. It is very interesting, because until now i was always reading about Germany, as a leader of whole EU. That it is the one that pull on whole economy of EU. But as we can see thanks to your post, also germany has own problems within regions as everyone. According to me regions are the base, country stands on them. It seems that Germany wants to solve it and is finding solutions such mobility and commutation. Disparities between East and West Germany are given by history, right? but also twice bigger unemloyment rate between Eastern and Western Germany is too much for such a country. We in Slovakia have it same maybe bigger difference but you know Slovakia, we are no exemplary country:-)

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  2. I didn’t know that there is still such a big difference between Easter and the Western part of Germany. It’s true that in every country, the economic situation is not uniform in all the country : we can see differences according to the regions and according to different criterions. For example, it’s the same situation in my country, France.
    But like said mima11 in the comment, the huge difference of unemployment rate between the 2 parts of the country is too big. Even if this disparity can be explained by the past history of the country, and by the labour mobility. So like the major pat of the European countries, the economic situation in Germany is complicated, and foremost the unemployment rate.

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