Even 30 years after reunification, income differences persist due to a productivity gap in the new Länder. Productivity is about 20% lower than in the rest of the country. The largest income differences are in the manufacturing sector, as headquarters and research centres remain concentrated in the West. Many young people have moved from East to West attracted by higher wages and better living standards. Between 1991 and 2016, the new Länder lost about one quarter of their working-age population. East and West have become closer demographically. Net migration is actually around zero, as income prospects in the East have improved. In addition, some regions in the West are now also experiencing a rapid ageing of their population, as has been the case in the East.
Recent economic data have improved on the back of the easing of lockdowns. This may create a feeling of false comfort. The effects of the severity of the crisis will make themselves felt well into the future. A key factor is the rise in unemployment and in unemployment expectations. Both weigh on household spending, due to related income losses and increased precautionary savings. The major national central banks of the Eurosystem expect unemployment to increase in 2021, despite the economic recovery. When visibility remains limited and the pressure on profits high, many companies have no other option than to reduce their labour force
The Covid-19 crisis will leave its mark on the economy. However, the decade ahead offers new prospects for growth and employment. Spain suffers from a lack of employment and investment in technology-related sectors, but has opportunities to close these gaps. The renewable energy sector can be a significant source of employment over the medium to long term.The National Energy and Climate Plan is a significant step forward (if passed and implemented). The European Green Pact and Brexit may also help boost high-tech investment in the country.
Job polarization describes the structural deformation of the job market in which the share of jobs increases at the top and bottom of the skills ladder and decreases for middling jobs. In theory, job polarization is U shaped. Empirical data easily shows a decline in the share of jobs in the middle distribution (the bottom of the U), as well as an increase in the most skilled jobs (right side of the U). This J-shaped semi-polarization is symptomatic of an “upgrading” effect, i.e. the overall rise in the level of education and skills attainment. The left side of the U, in contrast, which represents the increase in the share of low-skilled jobs, is often less developed and sometimes non-existent. In France, job polarization is more or less apparent depending on the study
