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Inequality of Earnings in Germany Generally Accepted but Low Incomes Considered Unfair

Author

Listed:
  • Jule Adriaans
  • Stefan Liebig

Abstract

Earnings differences are a recurring topic of public discussion in Germany. Data from the long-term Socio-Economic Panel (SOEP) study as well as a separate survey of German employees (LINOS) show that earnings inequalities are generally perceived as fair while a substantial share of the respondents find the current earnings distribution in Germany unfair. This applies above all to the middle and lower end of the earnings distribution, where respondents perceive there to be particularly severe underpayment. More rarely do respondents find that employees earning high salaries are unfairly overpaid. Perceived unfairness in the upper strata of the earnings distribution is associated with a reduction in effort at the workplace while perceived unfairness in the lower end of the earnings distribution is accompanied by a lack of participation in the democratic process.

Suggested Citation

  • Jule Adriaans & Stefan Liebig, 2018. "Inequality of Earnings in Germany Generally Accepted but Low Incomes Considered Unfair," DIW Weekly Report, DIW Berlin, German Institute for Economic Research, vol. 8(37), pages 347-352.
    • Handle: RePEc:diw:diwdwr:dwr8-37-1
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    File URL: https://www.diw.de/documents/publikationen/73/diw_01.c.597944.de/dwr-18-37-1.pdf
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    Cited by:

    1. Adriaans, Jule & Liebig, Stefan & Sabbagh, Clara & Jasso, Guillermina, 2021. "What’s in a Word? Just vs. Fair vs. Appropriate Earnings for Self and Others," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 34(4), pages 397-427.

    More about this item

    Keywords

    earnings inequality; fair earnings; reactions to unfair earnings;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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