Redistribution and Insurance in the German Welfare State

36 Pages Posted: 21 Dec 2011 Last revised: 11 Jul 2014

See all articles by Charlotte Bartels

Charlotte Bartels

German Institute for Economic Research (DIW Berlin) - German Socio Economic Panel

Date Written: December 1, 2011

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.

Keywords: long-term income inequality, income redistribution, social security

JEL Classification: D31, D63, H53, H55

Suggested Citation

Bartels, Charlotte, Redistribution and Insurance in the German Welfare State (December 1, 2011). SOEPpaper No. 419-2011, Available at SSRN: https://ssrn.com/abstract=1974880 or http://dx.doi.org/10.2139/ssrn.1974880

Charlotte Bartels (Contact Author)

German Institute for Economic Research (DIW Berlin) - German Socio Economic Panel ( email )

DIW Berlin
Berlin, Berlin 10117
Germany

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
95
Abstract Views
845
Rank
495,746
PlumX Metrics