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More than three decades after German reunification, the economy of former East Germany has made major progress toward matching the west, particularly in employment and household income. However, significant differences remain in wealth, wages, demographics and investment.
The unemployment divide, once one of Germany’s sharpest economic disparities, has narrowed substantially. Eastern unemployment approached 20% in the late 1990s, nearly twice the western rate. By 2025, registered unemployment had fallen to 8.6% in the east versus 6.4% in western Germany.
Employment rates are even closer. In 2025, 75.9% of working-age eastern Germans were employed, just 1.6 percentage points below the west. Among women, employment was virtually identical at 74.0% in the east and 74.1% in the west.
Income differences have also narrowed. Median disposable household income in eastern states, including Berlin, increased from about 82% of western levels in 2008 to roughly 92% in 2024. Eastern households had median disposable income of around €25,900 in 2024, compared with €28,100 in the west.
The wage gap remains larger. Full-time employees in eastern Germany, excluding Berlin, earned a median €46,013 in 2025, versus €55,435 in western states. Lower housing costs partly compensate, with asking rents in Saxony, Saxony-Anhalt and Thuringia roughly 30%-40% below Germany’s national average.
Germany’s east-west wealth gap is much wider. Average net household assets in the eastern states, including Berlin, reached €125,500 in 2023, compared with €257,100 in the west. Eastern households therefore held only about 49% of western household wealth.
Demographics present another long-term challenge. Around 1.2 million people moved net from east to west between 1991 and 2024, excluding Berlin. Eastern Germany also has an older population and a smaller working-age share.
Investment remains weaker as well, with eastern companies investing around 25% less per employee than western firms, according to the Ifo economic institute. These structural differences could make closing the remaining economic divide increasingly difficult.
