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Redistribution and Insurance in the German Welfare State

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  • Charlotte Bartels

Abstract

Welfare states redistribute both between individuals reducing annual inequality and over the life-cycle insuring against income risks. But studies measuring redistribution often focus only on a one-year period. Using German SOEP data from 1984 to 2009, long-term inequality over a 20-year period is computed and then decomposed into an inter-and intra-individual component. Results show that annual inequality is higher than long-term inequality, but redistribution is also larger from an annual perspective. In the long-term, the German welfare state clearly prioritizes insurance over redistribution. This gets even more pronounced at later stages of the life-cycle through the payment of social security pensions.

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File URL: http://dx.doi.org/10.3790/schm.132.2.265
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Bibliographic Info

Article provided by Duncker & Humblot, Berlin in its journal Schmollers Jahrbuch.

Volume (Year): 132 (2012)
Issue (Month): 2 ()
Pages: 265-295

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Handle: RePEc:aeq:aeqsjb:v132_y2012_i2_q2_p265-295

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Cited by:
  1. Charlotte Bartels, 2013. "Long-Term Participation Tax Rates," SOEPpapers on Multidisciplinary Panel Data Research 609, DIW Berlin, The German Socio-Economic Panel (SOEP).
  2. Mike Brewer & Monica Costa Dias & Jonathan Shaw, 2012. "Lifetime inequality and redistribution," IFS Working Papers W12/23, Institute for Fiscal Studies.

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