Daily News

View All News

Germany – East is East and West is West

27 July 2015

Twenty five years after the reunification of Germany there are still appreciable difference between the labour market in the East and West according to a new study by Institute for Employment Research (IAB).

 For a long time, unemployment in the East was twice as high as in the West. Although this difference has now fallen it is still 1.5 times higher, according to the IAB. Income, however, is considerably lower in the east with a pay gap of 20% and productivity although it has imporved from the one-third level at the time of the GDR has still only reached around three-quarters today the institute reports.

The difficulty according to the report is that  "East Germany has only a relatively small industrial sector and relatively few economically successful large enterprises. There is a lack of knowledge-intensive business services, as well as research and development activities of the economy”.

To improve the situation the IAB researchers believe that  "technology policy should be promoted with targeted innovations", and Berlin should be promoted to the fast-growing economies in Eastern Europe like “Singapore for the markets of Southeast Asia".

To purchase a full copy of the report in German, click on this link.