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Income Polarisation in Germany Is Rising

Author

Listed:
  • Jan Goebel
  • Martin Gornig
  • Hartmut Häußermann

Abstract

Income disparities between poorer and richer households in Germany have been widening since reunification. Although this income polarisation is reduced during economically favourable periods by strong growth in employment, once the good times are over, it rises all the faster. The longer-term trend not only shows that the number of poorer households is steadily increasing, but also that on average they are getting poorer. On the flip side, the trend is toward an increasing number of richer individuals, whose average wealth is steadily increasing. This contrast is not only felt to be highly unfair, but also creates uncertainty among the middle class. Although the year of the financial crisis, 2009, saw the number of high-income households decrease, the average incomes of the remaining rich households continued to rise. As a result of job market measures, the lower income bracket has scarcely been affected by the financial and economic crisis.

Suggested Citation

  • Jan Goebel & Martin Gornig & Hartmut Häußermann, 2010. "Income Polarisation in Germany Is Rising," Weekly Report, DIW Berlin, German Institute for Economic Research, vol. 6(26), pages 199-206.
  • Handle: RePEc:diw:diwwrp:wr6-26
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    File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.360946.de/diw_wr_2010-26.pdf
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    Citations

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    Cited by:

    1. Martin Gornig & Jan Goebel, 2018. "Deindustrialisation and the polarisation of household incomes: The example of urban agglomerations in Germany," Urban Studies, Urban Studies Journal Limited, vol. 55(4), pages 790-806, March.
    2. Martin Gornig & Jan Goebel, 2014. "Deindustrialization and Tertiarization and the Polarization of Household Incomes: The Example of German Agglomerations," ERSA conference papers ersa14p1172, European Regional Science Association.
    3. Salvatore Morelli & Timothy Smeeding & Jeffrey Thompson, 2014. "Post-1970 Trends in Within-Country Inequality and Poverty: Rich and Middle Income Countries," CSEF Working Papers 356, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.

    More about this item

    Keywords

    Income polarization; Middle class; SOEP;

    JEL classification:

    • D39 - Microeconomics - - Distribution - - - Other
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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