Changes in Economic Advantage by National Origin After German Unification

We use recently developed procedures to decompose German Lorenz curves for post-government incomes among East Germans, West Germans, and foreign guest workers after German unification. The decomposed Lorenz ordinates permit us to construct interdistributional Lorenz curves, which in turn allow dominance comparisons of changes in economic advantage in different years. Using interdistributional Gini indices to capture the magnitude of these changes, we find that the economic advantage of West Germans over East Germans diminished by more than one-third between 1992 and 1996. Over the same period the advantage of West Germans over guest workers increased by about one-fourth, while the advantage of guest workers over East Germans virtually vanished.