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The Evolution of Income Inequality in Germany and Switzerland since the Turn of the Millennium

Author

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  • Markus M. Grabka
  • Ursina Kuhn

Abstract

This paper presents and compares trends in income inequality in Switzerland and Germany from 2000 to 2009 using harmonized data from the Socio-Economic Panel (SOEP) and the Swiss Household Panel (SHP). Whereas in Germany inequality has increased substantially during this period, in Switzerland inequality in market incomes has increased onlymarginally and inequality in disposable incomes has decreased slightly. Economic and demographic indicators suggest that labor market participation - but not economic growth, globalization, or sectoral change - are potential explanations. The decomposition of inequality reveals the effects of Germany's slightly older population and smaller household sizes, as well as the impact of educational expansion and government redistribution.

Suggested Citation

  • Markus M. Grabka & Ursina Kuhn, 2012. "The Evolution of Income Inequality in Germany and Switzerland since the Turn of the Millennium," SOEPpapers on Multidisciplinary Panel Data Research 464, DIW Berlin, The German Socio-Economic Panel (SOEP).
    • Handle: RePEc:diw:diwsop:diw_sp464
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    File URL: https://www.diw.de/documents/publikationen/73/diw_01.c.407154.de/diw_sp0464.pdf
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    References listed on IDEAS

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    20. Fräßdorf, Anna & Grabka, Markus M. & Schwarze, Johannes, 2011. "The Impact of Household Capital Income on Income Inequality - A Factor Decomposition Analysis for the UK, Germany and the USA," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 9(1), pages 35-56.
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    Cited by:

    1. Mueller, Kai-Uwe & Steiner, Viktor, 2013. "Behavioral effects of a federal minimum wage and income inequality in Germany," VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79784, Verein für Socialpolitik / German Economic Association.
    2. Oliver Lipps & Daniel Oesch, 2017. "The Working Class Left Behind? The Class Gap in Life Satisfaction in Germany and Switzerland over the Last Decades," SOEPpapers on Multidisciplinary Panel Data Research 940, DIW Berlin, The German Socio-Economic Panel (SOEP).
    3. Mönnig Anke & Maier Tobias & Zika Gerd, 2019. "Economy 4.0 – Digitalisation and Its Effect on Wage Inequality," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 239(3), pages 363-398, June.
    4. Salvatore Morelli & Timothy Smeeding & Jeffrey Thompson, 2014. "Post-1970 Trends in Within-Country Inequality and Poverty: Rich and Middle Income Countries," CSEF Working Papers 356, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    5. 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.

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    More about this item

    Keywords

    Income inequality; subgroup decomposition; income stratification; income mobility; SOEP; SHP;
    All these keywords.

    JEL classification:

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

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