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Income Inequality Remains High in Germany: Young Singles and Career Entrants Increasingly at Risk of Poverty

Author

Listed:
  • Jan Goebel
  • Markus M. Grabka
  • Carsten Schröder

Abstract

According to calculations based on the Socio-Economic Panel (SOEP) study, average disposable household income rose by five percent in real terms between 2000 and 2012. Only the highest earners have benefited from this development. While real income in the top ten percent rose by more than 15 percent, the earnings of the middle income groups stagnated, and even fell in the lower income groups. As a result, the inequality of disposable household income in Germany climbed sharply up until 2005 and has remained at the same high level ever since. At the same time, the risk of poverty in Germany increased significantly between 2000 and 2009, and is currently at approximately 14 percent. The risk of poverty has risen significantly for young singles (up to the age of 35) in particular. Their at-risk-of-poverty rate increased by 12 percentage points since 2000 to just under 40 percent in 2012. Even being in gainful employment does not necessarily protect them from poverty: in particular, young adults (aged 25 to 35) who are just starting out in their careers are increasingly at risk of poverty.

Suggested Citation

  • Jan Goebel & Markus M. Grabka & Carsten Schröder, 2015. "Income Inequality Remains High in Germany: Young Singles and Career Entrants Increasingly at Risk of Poverty," DIW Economic Bulletin, DIW Berlin, German Institute for Economic Research, vol. 5(25), pages 325-339.
    • Handle: RePEc:diw:diwdeb:2015-25-1
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    Citations

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    Cited by:

    1. Katrin Huber & Erwin Winkler, 2016. "All We Need is Love? Trade-Adjustment, Inequality, and the Role of the Partner," SOEPpapers on Multidisciplinary Panel Data Research 873, DIW Berlin, The German Socio-Economic Panel (SOEP).
    2. Bernadette Huyer-May & Claudia Schmiedeberg & Nina Schumann, 2018. "Neighborhood Effects on Children’s Subjective Deprivation: Are Poor Children’s Perceptions of the Economic Situation in their Home Influenced by their Neighborhood?," Child Indicators Research, Springer;The International Society of Child Indicators (ISCI), vol. 11(1), pages 291-305, February.
    3. Gilang Hardadi & Alexander Buchholz & Stefan Pauliuk, 2021. "Implications of the distribution of German household environmental footprints across income groups for integrating environmental and social policy design," Journal of Industrial Ecology, Yale University, vol. 25(1), pages 95-113, February.
    4. Michele Battisti & Gabriel Felbermayr & Sybille Lehwald, 2016. "Inequality in Germany: Myths, Facts, and Policy Implications," ifo Working Paper Series 217, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    5. Süß Philipp, 2020. "Regional Market Income Inequality and its Impact on Crime in Germany: A Spatial Panel Data Approach with Local Spillovers," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 240(4), pages 387-415, August.
    6. Claudia Schmiedeberg & Nina Schumann, 2019. "Poverty and Adverse Peer Relationships among Children in Germany: a Longitudinal Study," Child Indicators Research, Springer;The International Society of Child Indicators (ISCI), vol. 12(5), pages 1717-1733, October.
    7. Huber, Katrin & Winkler, Erwin, 2019. "All you need is love? Trade shocks, inequality, and risk sharing between partners," European Economic Review, Elsevier, vol. 111(C), pages 305-335.

    More about this item

    Keywords

    Income inequality; poverty; 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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