We study an overlapping generations model of human capital accumulation with threshold effects using regional data for West Germany. Our basic goal is to shed light on what makes German regions grow. The paper finds that the relative income distribution appears to be stratifying into a trimodal...

Increasing inequality in qualification specific employment prospects characterises labour markets in most highly developed countries. Theoretical models suggest that in-plant skill segregation might matter for the polarisation of employment and wages. According to these models production...