Einkommensverteilung in Deutschland. Strukturanalyse der Ungleichheit nach Einkommenskomponenten / The Personal Distribution of Income in Germany. A Decomposition Analysis of Income Sources

Analyses of the Income and Consumption Surveys 1988 and 1993 using the "old" OECD equivalence scale have shown that inequality of the personal distribution of net equivalent income has increased in West Germany and is still lower in East Germany. Decomposing aggregate inequality by income sources yields that the distribution of wages and salaries contributes most to overall inequality. Indeed, income from self-employment and from assets is distributed much more unequally, but because of their small share in total income their contribution to overall inequality of the personal distribution of income is reduced. As transfers from the social insurance system are mainly aimed at intertemporal redistribution and maintaining some living standard in case of old age, widowhood, disability, unemployment or sickness, they do not reduce inequality of the personal distribution of income; in West Germany they even account for a little increase in inequality. On the other side, there is a remarkably equalizing effect of other state transfers, especially of means-tested transfers. Indeed, in absolute terms this is much smaller than the equalizing effect of the income tax, but with regard to the small volume of means-tested transfers they nevertheless seem to be of high efficiency.