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Reduction in Income Inequality Faltering

Author

Listed:
  • Markus M. Grabka
  • Jan Goebel

Abstract

Inequality of disposable incomes in Germany has decreased slightly since its peak in 2005. However, this trend did not continue in 2011. The most important reasons for this were the inequality in market incomes, including capital incomes, which had increased again. Besides this finding, the updated analyses of personal income distribution based on the Socio-Economic Panel Study (SOEP) show that the risk of poverty did not rise further after a long period of upward movement. Income mobility over time is equally important in terms of social policy, i.e., the upward or downward movement of individual groups of people in the income hierarchy. Here, the most recent analyses confirm the trend of significantly decreasing income mobility since German reunification. For example, the odds of exiting the risk of poverty within a period of four years has dropped by ten percentage points to 46 percent in recent years.

Suggested Citation

  • Markus M. Grabka & Jan Goebel, 2014. "Reduction in Income Inequality Faltering," DIW Economic Bulletin, DIW Berlin, German Institute for Economic Research, vol. 4(1), pages 16-25.
    • Handle: RePEc:diw:diwdeb:2014-1-3
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    File URL: https://www.diw.de/documents/publikationen/73/diw_01.c.435971.de/diw_econ_bull_2014-01-3.pdf
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    Citations

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    Cited by:

    1. Eckhard Hein & Daniel Detzer, 2015. "Finance-Dominated Capitalism and Income Distribution: A Kaleckian Perspective on the Case of Germany," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 1(2), pages 171-191, July.
    2. Martin Gornig & Jan Goebel, 2014. "Deindustrialization and Tertiarization and the Polarization of Household Incomes: The Example of German Agglomerations," ERSA conference papers ersa14p1172, European Regional Science Association.
    3. Sebastian Schmitz, 2019. "The Effects of Germany's Statutory Minimum Wage on Employment and Welfare Dependency," German Economic Review, Verein für Socialpolitik, vol. 20(3), pages 330-355, August.
    4. Gustav A. Horn & Sebastian Gechert & Miriam Rehm & Kai D. Schmid, 2014. "Wirtschaftskrise unterbricht Anstieg der Ungleichheit," IMK Report 97-2014, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    5. Detzer, Daniel & Hein, Eckhard, 2014. "Financialisation and the financial and economic crises: The case of Germany," IPE Working Papers 44/2014, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    6. Gornig, Martin & Goebel, Jan, 2018. "Deindustrialisation and the polarisation of household incomes: The example of urban agglomerations in Germany," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 55(4), pages 790-806.
    7. Miriam Rehm & Kai Daniel Schmid & Dieter Wang, 2014. "Why has Inequality in Germany not Risen Further After 2005?," IMK Working Paper 137-2014, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    8. Junia Howell, 2019. "Neighbourhood effects in cross-Atlantic perspective: A longitudinal analysis of impacts on intergenerational mobility in the USA and Germany," Urban Studies, Urban Studies Journal Limited, vol. 56(2), pages 434-451, February.
    9. Grabka, Markus M., 2015. "Income and Wealth Inequality after the Financial Crisis: The Case of Germany," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 42(2), pages 371-390.
    10. Schmitz, Sebastian, 2017. "The effects of Germany's new minimum wage on employment and welfare dependency," Discussion Papers 2017/21, Free University Berlin, School of Business & Economics.

    More about this item

    Keywords

    Income inequality; income mobility; SOEP;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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