The Unification of Germany and Regional Economic Convergence: Evidence from Real Wage Data, 1850-1889

Sammanfattning: This thesis studies the regional development of Germany in the 19th century, examining whether there was an increased tendency toward economic convergence between the German states following the country’s unification. Through a quantitative analysis using real wage data on various German cities and regions covering the period 1850-1889, the study looks for evidence of beta-convergence both before and after the unification of 1871, as well as evidence for sigma-convergence during the whole period. The empirical study finds very weak evidence for beta-convergence at either the state- or city-level following the unification, and even finds signs of sigma-divergence rather than convergence, with economic differences seemingly having been somewhat smaller before the unification. However, the data are determined to not be sufficiently wide-reaching to support many definitive conclusions.