Unemployment Rates in Germany

Nicola Fuchs-Schundeln, assistant professor of economics, joined forces with Rima Izem, assistant professor of statistics, and with the help of the Center for Geographic Analysis undertook a spatial analysis of unemployment rates in Germany. Their goal is to explain the stubbornly low labor productivity in the former East Germany, and their findings could have public-policy implications. The project is a work in progress. The map at far left shows the sharp break in unemployment rates at the former East-West border; the unemployment rate in the West is about half that in the East, even after reunification. The simulated unemployment rates are based on a model developed by Fuchs-Schundeln and Izem that explains the gap in unemployment rates by differences in job characteristics and workers' skills in East and West. The model shows the effects of individuals' commuting behavior between counties.