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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 annually. In the long-term, the German welfare state clearly gives priority to insurance over redistribution. This gets even more pronounced at later stages of the life-cycle through the payment of social security pensions.

Suggested Citation

  • Charlotte Bartels, 2011. "Redistribution and Insurance in the German Welfare State," SOEPpapers on Multidisciplinary Panel Data Research 419, DIW Berlin, The German Socio-Economic Panel (SOEP).
    • Handle: RePEc:diw:diwsop:diw_sp419
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    References listed on IDEAS

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    Cited by:

    1. Mike Brewer & Monica Costa Dias & Jonathan Shaw, 2012. "Lifetime inequality and redistribution," IFS Working Papers W12/23, Institute for Fiscal Studies.
    2. Bartels, Charlotte, 2012. "Long-term participation tax rates," Discussion Papers 2012/20, Free University Berlin, School of Business & Economics.
    3. Jonathan Shaw, 2014. "The redistribution and insurance value of welfare reform," IFS Working Papers W14/21, Institute for Fiscal Studies.

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    Keywords

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    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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