INEQUALITY AND SOCIAL-POLICY IN THE NEW B UNDESLANDER

This article summarizes the main results of the report on ''Inequality and Social Policy'', prepared by the Working Group II of the Commissi on for Research in the Social and Political Changes in the New Bundesl ander. Starting from the methodological viewpoint that the effects of the changes of the economic, social and political system should in pri nciple be separated from the effects of reunification, the article lis ts the main differences between the West German and the former East Ge rman systems, and then sketches the changes resulting from the introdu ction of the West German social policy arrangements in the New Bundesl ander. First the article describes briefly the economic development du ring the first five years after reunification that formed the basis fo r social policy. On the one hand, there was a considerable increase in overall living standards. On the other hand, it is argued that the pr ocess of catching up with West German standards will take one generati on and that, therefore, considerable transfers from West to East Germa ny will be necessary for many years. An analysis of the income distrib ution shows that inequality is still lower in the East but that it is increasing sharply. Inequality of the wealth distribution is more uneq ual in the East, because the ownership of land and houses is much more concentrated. Among the groups that gained least or even lost by the change of the system, the unemployed and single parents stand out whil e pensioners were among those that gained most. On average subjective well-being in the East is still lower than in the West, and it is expe cted that this difference will be maintained for a long time.