On Rich Cities and Boring Places

Abstract

This paper investigates the effect of city size on income inequality in Germany after reunification. Using the Gini index, income inequality is computed. No correlation between income inequality and city size can be found, but dividing Germany in East and West Germany gives further insight into the dependence. It can be seen that a positive connection between city size and income inequality exists in West Germany, while in East Germany no correlation can be found. Another interesting point is the development of income in East German cities. It is shown in this paper that incomes increase rapidly in all cities while the increase in inequality is astonishingly small.