Trends in the German Income Distribution: 2005/06 to 2010/11

46 Pages Posted: 13 Jan 2017

See all articles by Martin Biewen

Martin Biewen

University of Tuebingen; Institute for the Study of Labor (IZA)

Martin Ungerer

ZEW – Leibniz Centre for European Economic Research

Max Loeffler

ZEW – Leibniz Centre for European Economic Research

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Date Written: November 15, 2016

Abstract

We analyze the potential influence of a number of factors on the distribution of equivalized net incomes in Germany over the period 2005/2006 to 2010/11. While income inequality considerably increased in the years before 2005/2006, this trend was stopped after 2005/2006. Among many other factors, we consider the role of the employment boom and the development of inequality in wage incomes after 2005/2006. Our results suggest that, despite further increases in wage inequality, inequality in equivalized net incomes did not increase further after 2005/2006 because increased within-year employment opportunities compensated otherwise rising inequality in annual labour incomes. On the other hand, income inequality did not fall in a more marked way after 2005/2006 because also the middle and the upper part of the distribution benefited from the employment boom. Other factors, such as changing household structures, population aging and changes in the tax and transfer system had no important effects on the distribution. Finally, we find little evidence that the distribution of equivalized net incomes was affected in any important way by the financial crisis and the subsequent great recession.

Keywords: income inequality, poverty

JEL Classification: C14, D31, I30

Suggested Citation

Biewen, Martin and Ungerer, Martin and Loeffler, Max, Trends in the German Income Distribution: 2005/06 to 2010/11 (November 15, 2016). ZEW - Centre for European Economic Research Discussion Paper No. 16-088, Available at SSRN: https://ssrn.com/abstract=2898127 or http://dx.doi.org/10.2139/ssrn.2898127

Martin Biewen

University of Tuebingen ( email )

Eberhard Karls Universität
Geschwister-Scholl-Platz
Tübingen, 72074
Germany

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

Martin Ungerer (Contact Author)

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

Max Loeffler

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

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