Inequality of Opportunity: East vs. West Germany

The case of German reunification has been subject to extensive research on earnings inequality and labour market integration. However, little is known about the development of equality of opportunity (EOp) in East and West Germany after 1990. Using German micro data, we empirically analyse how circumstances beyond the sphere of individual control relate to inequality in East and West Germany. Our results show that EOp is larger in East than in West Germany. However, despite increasing income inequality, EOp remained surprisingly constant.

Peichl, Andreas and Martin Streng (2016), Inequality of Opportunity: East vs. West Germany, Bulletin of Economic Research