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Deindustrialization and the Polarization of Household Incomes: The Example of Urban Agglomerations in Germany

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  • Gornig, Martin
  • Goebel, Jan
Abstract
The tertiarization, or perhaps more accurately, the deindustrialization of the economy has left deep scars on cities. It is evident not only in the industrial wastelands and empty factory buildings scattered throughout the urban landscape, but also in the income and social structures of cities. Industrialization, collective wage setting and the welfare state led to a stark reduction in income differences over the course of the twentieth century. Conversely, deindustrialization and the shift to tertiary sectors could result in increasing wage differentiation. Moreover, numerous studies on global cities, the dual city, and divided cities have also identified income polarization as a central phenomenon in the development of major cities. Using data from the German Socio-Economic Panel (SOEP), we find an increasing polarization of household income structures since the mid-1990. In agglomerations, this income polarization is even more pronounced than in the more rural regions. The income polarization in Germany is likely to have multiple causes, some of which are directly linked to policies such as the deregulation of the labor market. But extensive deindustrialization is probably also one of the drivers, that has led directly to the weakening of middle income groups.

Suggested Citation

  • Gornig, Martin & Goebel, Jan, 2015. "Deindustrialization and the Polarization of Household Incomes: The Example of Urban Agglomerations in Germany," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112894, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc15:112894
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    2. Margherita Carlucci & Sabato Vinci & Giuseppe Ricciardo Lamonica & Luca Salvati, 2022. "Socio-spatial Disparities and the Crisis: Swimming Pools as a Proxy of Class Segregation in Athens," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 161(2), pages 937-961, June.
    3. Adolfo Maza & María Hierro, 2022. "Attempting to measure the intensity of opposing feelings in elections: A polarization approach to Catalonia’s independence case," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 39(2), pages 323-344, July.
    4. Congjian Chen & Qing Zhong & Yang Cao & Guangfu Xu & Bing Chen, 2024. "The Primacy Evaluation and Pattern Evolution Mechanism of the Central City in Nanjing Metropolitan Area," Sustainability, MDPI, vol. 16(18), pages 1-23, September.
    5. Chakravarty, Dwarka & Goerzen, Anthony & Musteen, Martina & Ahsan, Mujtaba, 2021. "Global cities: A multi-disciplinary review and research agenda," Journal of World Business, Elsevier, vol. 56(3).

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    More about this item

    JEL classification:

    • R20 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - General
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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