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Factor Shares and Income Inequality. Empiral Evidence from Germany 2002 – 2008

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  • Adler, Martin
  • Schmid, Kai Daniel

Abstract

Using micro data from the German Socio-Economic Panel we examine the interplay between changes in the functional distribution of income and the distribution of market income among individuals. In particular, we categorize and evaluate the implications of changing income shares from asset flows for the concentration of market income. Our empirical analysis offers two insights: First, the relative rise of income from asset flows reported by German National Accounting Statistics is also evident in the micro data taken from the German Socio-Economic Panel. Second, rising capital income shares are associated with an increasing concentration of market income.

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  • Adler, Martin & Schmid, Kai Daniel, 2013. "Factor Shares and Income Inequality. Empiral Evidence from Germany 2002 – 2008," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 133(2), pages 121-132.
    • Handle: RePEc:aeq:aeqsjb:v133_y2013_i2_q2_p121-132
    DOI: 10.3790/schm.133.2.121
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    1. Rodrik, Dani, 2007. "How to Save Globalization from its Cheerleaders," CEPR Discussion Papers 6494, C.E.P.R. Discussion Papers.
    2. Ryan, Paul, 1996. "Factor Shares and Inequality in the UK," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 12(1), pages 106-126, Spring.
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    4. Markus M. Grabka, 2009. "Codebook for the $PEQUIV File 1984-2008: CNEF Variables with Extended Income Information for the SOEP," Data Documentation 45, DIW Berlin, German Institute for Economic Research.
    5. Schäfer, Claus, 2010. "Zukunftsgefährdung statt Krisenlehren - WSI-Verteilungsbericht 2010," WSI-Mitteilungen, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 63(12), pages 636-645.
    6. Markus M. Grabka, 2010. "Codebook for the $PEQUIV File 1984-2009: CNEF Variables with Extended Income Information for the SOEP," Data Documentation 49, DIW Berlin, German Institute for Economic Research.
    7. Klaus-Dietrich Bedau, 1994. "Das Einkommen sozialer Haushaltsgruppen in Westdeutschland im Jahre 1992," DIW Wochenbericht, DIW Berlin, German Institute for Economic Research, vol. 61(45), pages 769-779.
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    Cited by:

    1. Alessandro Bellocchi, 2020. "Labor share is falling down, but which one?," Working Papers 2001, University of Urbino Carlo Bo, Department of Economics, Society & Politics - Scientific Committee - L. Stefanini & G. Travaglini, revised 2020.
    2. Eva Schlenker & Kai Daniel Schmid, 2013. "Capital Income Shares and Income Inequality in the European Union," IMK Working Paper 119-2013, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    3. Molero-Simarro, Ricardo, 2017. "Inequality in China revisited. The effect of functional distribution of income on urban top incomes, the urban-rural gap and the Gini index, 1978–2015," China Economic Review, Elsevier, vol. 42(C), pages 101-117.
    4. Sinem Sefil Tansever, 2017. "Labor Income Share Consequences of Global Financial Crisis: Evidence from Turkey," International Journal of Business and Economic Sciences Applied Research (IJBESAR), Democritus University of Thrace (DUTH), Kavala Campus, Greece, vol. 10(2), pages 73-84, June.
    5. Laura Chies, 2013. "Riforme del mercato del lavoro e distribuzione del reddito in Germania," ECONOMIA E SOCIET? REGIONALE, FrancoAngeli Editore, vol. 0(2), pages 42-64.
    6. Kai Daniel Schmid & Ulrike Stein, 2013. "Explaining Rising Income Inequality in Germany, 1991-2010," SOEPpapers on Multidisciplinary Panel Data Research 592, DIW Berlin, The German Socio-Economic Panel (SOEP).
    7. Maura Francese & Mr. Carlos Mulas-Granados, 2015. "Functional Income Distribution and Its Role in Explaining Inequality," IMF Working Papers 2015/244, International Monetary Fund.
    8. Bianca VEZENTAN & Olimpia NEAGU, 2023. "The Labour Share In Households’ Income Inequality In Romania," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 32(1), pages 297-312, July.

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    More about this item

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution

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