Advanced Search
MyIDEAS: Login to save this paper or follow this series

Explaining Rising Income Inequality in Germany, 1991-2010

Contents:

Author Info

  • Kai Daniel Schmid
  • Ulrike Stein

Abstract

In Germany, inequality of net equivalized income increased noticeably in the first half of the new millennium. We aim to identify the main drivers of this rise in income inequality since the early 1990s. We provide a broad overview of the circumstances under which inequality evolved, i.e. which changes in the German economy are most likely to provide an explanation for changes in income concentration. To explain the development of the distribution of net equivalized income we analyze changes in the distribution of market income as well as shifts in the effectiveness of public redistribution mechanisms. We find that cyclical and structural changes in the labor market, the increasing relevance of capital income as well as the decreasing effectiveness of the public mechanisms of income redistribution are the main explanatory factors for the development of income inequality. In addition to this, we discuss several issues that are of high relevance for the distribution of economic resources but are not directly covered in the analysis of net equivalized income. Most significantly, the design of the tax and social security contributions burden as well as the rising relevance of value-added taxes have exhibited negative redistributive effects for low income households.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.429232.de/diw_sp0592.pdf
Download Restriction: no

Bibliographic Info

Paper provided by DIW Berlin, The German Socio-Economic Panel (SOEP) in its series SOEPpapers on Multidisciplinary Panel Data Research with number 592.

as in new window
Length: 45 p.
Date of creation: 2013
Date of revision:
Handle: RePEc:diw:diwsop:diw_sp592

Contact details of provider:
Postal: Mohrenstraße 58, D-10117 Berlin
Phone: xx49-30-89789-671
Fax: xx49-30-89789-109
Email:
Web page: http://www.diw.de/en/soep
More information through EDIRC

Related research

Keywords: Income Inequality; Redistribution; SOEP;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Daniel Horgos, 2007. "Labor Market Effects of International Outsourcing: How Measurement Matters," SOEPpapers on Multidisciplinary Panel Data Research 58, DIW Berlin, The German Socio-Economic Panel (SOEP).
  2. Michael C. Burda & Michael Kvasnicka, 2005. "Zeitarbeit in Deutschland: Trends und Perspektiven," SFB 649 Discussion Papers SFB649DP2005-048, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
  3. Marin, Dalia, 2004. "'A Nation of Poets and Thinkers' - Less So with Eastern Enlargement? Austria and Germany," Discussion Papers in Economics 329, University of Munich, Department of Economics.
  4. Riphahn, Regina T. & Schnitzlein, Daniel D., 2011. "Wage Mobility in East and West Germany," IZA Discussion Papers 6246, Institute for the Study of Labor (IZA).
  5. Dirk Krüger, 2009. "Inequality Trends for Germany in the Last Two Decades: A Tale of Two Countries," MEA discussion paper series 09184, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
  6. Fräßdorf, Anna & Grabka, Markus M. & Schwarze, Johannes, 2008. "The Impact of Household Capital Income on Income Inequality: A Factor Decomposition Analysis for Great Britain, Germany and the USA," IZA Discussion Papers 3492, Institute for the Study of Labor (IZA).
  7. Becker, Sascha O. & Ekholm, Karolina & Muendler, Marc-Andreas, 2009. "Offshoring and the Onshore Composition of Tasks and Skills," CEPR Discussion Papers 7391, C.E.P.R. Discussion Papers.
  8. Stefan Bach & Giacomo Corneo & Viktor Steiner, 2009. "From Bottom To Top: The Entire Income Distribution In Germany, 1992-2003," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 55(2), pages 303-330, 06.
  9. Martin Adler & Kai Daniel Schmid, 2012. "Factor Shares and Income Inequality: Empirical Evidence from Germany 2002-2008," SOEPpapers on Multidisciplinary Panel Data Research 460, DIW Berlin, The German Socio-Economic Panel (SOEP).
  10. Gert G. Wagner & Joachim R. Frick & Jürgen Schupp, 2007. "The German Socio-Economic Panel Study (SOEP): Scope, Evolution and Enhancements," SOEPpapers on Multidisciplinary Panel Data Research 1, DIW Berlin, The German Socio-Economic Panel (SOEP).
  11. Markus M. Grabka & Jan Goebel & Jürgen Schupp, 2012. "Höhepunkt der Einkommensungleichheit in Deutschland überschritten?," DIW Wochenbericht, DIW Berlin, German Institute for Economic Research, vol. 79(43), pages 3-15.
  12. Katz, Lawrence F. & Autor, David H., 1999. "Changes in the wage structure and earnings inequality," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 26, pages 1463-1555 Elsevier.
  13. Pierre-Olivier Gourinchas, 1999. "Exchange Rates and Jobs: What Do We Learn from Job Flows?," NBER Chapters, in: NBER Macroeconomics Annual 1998, volume 13, pages 153-222 National Bureau of Economic Research, Inc.
  14. Dustmann, Christian & Ludsteck, Johannes & Schönberg, Uta, 2007. "Revisiting the German Wage Structure," IZA Discussion Papers 2685, Institute for the Study of Labor (IZA).
  15. David Card & Jörg Heining & Patrick Kline, 2013. "Workplace Heterogeneity and the Rise of West German Wage Inequality," The Quarterly Journal of Economics, Oxford University Press, vol. 128(3), pages 967-1015.
  16. Daniel Horgos, 2009. "International Outsourcing and Wage Rigidity: A Formal Approach and First Empirical Evidence," FIW Working Paper series 027, FIW.
  17. Geishecker, Ingo & Görg, Holger, 2007. "Winners and losers: A Micro-level Analysis of International Outsourcing and Wages," CEPR Discussion Papers 6484, C.E.P.R. Discussion Papers.
  18. Gernandt, Johannes & Pfeiffer, Friedhelm, 2006. "Rising Wage Inequality in Germany," ZEW Discussion Papers 06-19 [rev.], ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  19. Martin Biewen & Andos Juhasz, 2012. "Understanding Rising Income Inequality in Germany, 1999/2000–2005/2006," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 58(4), pages 622-647, December.
  20. Deborah Winkler, William Milberg, 2009. "WP 2009-12 Errors from the “Proportionality Assumption†in the Measurement of Offshoring: Application to German Labor Demand," SCEPA working paper series. SCEPA's main areas of research are macroeconomic policy, inequality and poverty, and globalization. 2009-12, Schwartz Center for Economic Policy Analysis (SCEPA), The New School.
  21. Antonczyk, Dirk & Fitzenberger, Bernd & Sommerfeld, Katrin, 2010. "Rising wage inequality, the decline of collective bargaining, and the gender wage gap," Labour Economics, Elsevier, vol. 17(5), pages 835-847, October.
  22. Krebs, tom & Krishna, Pravin & Maloney, William, 2005. "Trade policy, income risk, and welfare," Policy Research Working Paper Series 3622, The World Bank.
  23. Alexandra Spitz-Oener, 2006. "Technical Change, Job Tasks, and Rising Educational Demands: Looking outside the Wage Structure," Journal of Labor Economics, University of Chicago Press, vol. 24(2), pages 235-270, April.
  24. Martin Biewen & Andos Juhasz, 2011. "Can Employment Changes Explain Rising Income Inequality in Germany?," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 131(2), pages 349-357.
  25. Geishecker, Ingo, 2008. "The impact of international outsourcing on individual employment security: A micro-level analysis," Labour Economics, Elsevier, vol. 15(3), pages 291-314, June.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Schlenker, Eva & Schmid, Kai D., 2013. "Capital income shares and income inequality in the European Union," FZID Discussion Papers 80-2013, University of Hohenheim, Center for Research on Innovation and Services (FZID).
  2. Alexander Herzog-Stein & Fabian Lindner & Rudolf Zwiener, 2013. "Is the supply side all that counts?," IMK Report 87e-2013, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
  3. Moritz Drechsel-Grau & Kai D. Schmid, 2013. "Consumption-Savings Decisions under Upward Looking Comparisons: Evidence from Germany, 2002-2011," SOEPpapers on Multidisciplinary Panel Data Research 594, DIW Berlin, The German Socio-Economic Panel (SOEP).

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:diw:diwsop:diw_sp592. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bibliothek).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.