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The Broken Elevator: Declining Absolute Mobility of Living Standards in Germany

Author

Listed:
  • Timm Bönke
  • Astrid Harnack-Eber
  • Holger Lüthen

Abstract

This study provides the first absolute income mobility estimates for postwar Germany. Using various micro data sources, we uncover a steep decline in absolute mobility rates from 81 percent to 59 percent for children’s birth cohorts 1962 through 1988. This trend is robust across different ages, family sizes, measurement methods, copulas, and data sources. Across the parental income distribution, we find that children from middle class families experienced the largest percentage point drop in absolute income mobility (-31pp). Our counterfactual analysis shows that lower economic growth rates and higher income inequality contributed similarly to these trends.

Suggested Citation

  • Timm Bönke & Astrid Harnack-Eber & Holger Lüthen, 2024. "The Broken Elevator: Declining Absolute Mobility of Living Standards in Germany," Discussion Papers of DIW Berlin 2068, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwwpp:dp2068
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    References listed on IDEAS

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    8. Dodin, Majed & Findeisen, Sebastian & Henkel, Lukas & Sachs, Dominik & Schüle, Paul, 2024. "Social mobility in Germany," Journal of Public Economics, Elsevier, vol. 232(C).
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    Cited by:

    1. Julia Baarck & Moritz Bode & Andreas Peichl, 2025. "Rising Inequality, Declining Mobility: The Evolution of Intergenerational Mobility in Germany," CEBI working paper series 25-15, University of Copenhagen. Department of Economics. The Center for Economic Behavior and Inequality (CEBI).
    2. Julia Baarck & Moritz Bode & Andreas Peichl, 2025. "Rising Inequality, Declining Mobility: The Evolution of Intergenerational Mobility in Germany," CESifo Working Paper Series 12058, CESifo.

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    Keywords

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    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H0 - Public Economics - - General
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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