The German miracle or the miracle of the cultural attitude Inequality and convergence as products of culture in Germany

Tubadji, Annie; Gnezdilova, Natalya

Abstract

© Emerald Group Publishing Limited. Purpose : The purpose of this paper is to explore the link between redistribution, convergence and local cultural capital (as defined by culture-based development concept).Design/methodology/approach : The paper infers the basic mechanism of the cultural dependence of convergence and inequality - through an empirical test for the case of the "German jobmiracle" during the current crisis. Two empirical questions are asked: first, is local income inequality associated with local cultural capital and second, is the negative convergence between East and West Germany during the crisis related to culturally sensitive employers' preference for job preservation vs job loss. An OLS enquiry and two deeper estimation methods (a logitmodel and a 3SLS simultaneous equationsmodel) are alternatively applied in order to triangulate the empirical results.Findings : The findings support the existence of cultural effect on local income inequality and cultural path dependence of employers' preferences for job preservation vs job loss in a condition of economic shock.Originality/value : The paper provides both theoretical reasoning and empirical illustration of the significance of the cultural effect on human preferences which may or may not allow for redistribution and convergence between localities.

• Journal Article Type: Article
• Acceptance Date: Feb 1, 2014
• Publication Date: Jan 1, 2014
• Journal: International Journal of Social Economics
• Print ISSN: 0306-8293
• Publisher: Emerald
• Peer Reviewed: Peer Reviewed
• Volume: 41
• Issue: 11
• Pages: 1014-1037
• DOI: https://doi.org/10.1108/IJSE-11-2012-0211
• Keywords: employment, culture, income distribution, local economies, sustainable development
• Public URL: https://uwe-repository.worktribe.com/output/807990
• Publisher URL: https://doi.org/10.1108/IJSE-11-2012-0211