Germany’s east-west divide shifts from jobs to wealth

Germany’s east-west economic divide has evolved from a focus on employment to a disparity in wealth, more than 30 years after the country’s reunification. While the gap in unemployment rates has narrowed significantly, households in the former East Germany still earn considerably less on average. With a median disposable income of €25,900 in 2024, compared to €28,100 in the West, the east lags behind by nearly €2,200 annually.

Similarly, full-time employees earn an average of €46,013 in the east, versus €55,435 in the west, a €9,422 difference. Although living costs, particularly housing, are lower in the east, helping to reduce the income gap, the overall wealth disparity remains substantial. In 2023, eastern German households held about 49% of the average wealth of their western counterparts, a gap of roughly €132,000 per household.

The wealth disparity is even more pronounced when considering net household assets, including property, investments, pension savings, and goods. In 2023, eastern households' average net assets were €125,500, compared to €257,100 in the west. This wealth gap is likely to persist across generations, as the east has experienced a significant outflow of younger residents due to post-reunification migration, a higher aging population, and lower birth rates.

This demographic shift makes it harder for eastern employers to recruit from a larger labor pool, further exacerbating the economic divide between the east and west.