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German male income volatility 1984 to 2008

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  • Bartels, Charlotte
  • Bönke, Timm

Abstract

Deploying data from the German Socio-Economic Panel (GSOEP) we analyze the variability of individual earnings and equivalent household income. Permanent and transitory variances of male income over the period 1984-2008 are estimated for Old German Laender in order to determine their importance to income dynamics. To uncover the role of the welfare state in smoothening earnings shocks we compute different income concepts reaching from gross earnings to net equivalent household income. We find evidence that the overall inequality of earnings in Germany has been rising throughout the period due to both higher permanent inequality and higher volatility. However, taking the welfare state and its institutions into account, we find that net household income has remained fairly stable. --

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Bibliographic Info

Paper provided by Free University Berlin, School of Business & Economics in its series Discussion Papers with number 2010/18.

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Date of creation: 2010
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Handle: RePEc:zbw:fubsbe:201018

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Keywords: Earnings Inequality; Permanent Income Inequality; Transitory Income Volatility; Earnings Dynamics; Safety Net; Transfer Payments;

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Cited by:
  1. Gulgun Bayaz Ozturk & Richard V. Burkhauser & Kenneth A. Couch, 2013. "Consolidating the Evidence on Income Mobility in the Western States of Germany and the U.S. from 1984-2006," SOEPpapers on Multidisciplinary Panel Data Research 544, DIW Berlin, The German Socio-Economic Panel (SOEP).
  2. Charlotte Bartels, 2012. "Redistribution and Insurance in the German Welfare State," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 132(2), pages 265-295.

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