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Routes to the Top

Author

Listed:
  • Johannes König
  • Christian Schluter
  • Carsten Schröder

Abstract

Who makes it to the top? We use the leading, socio-economic survey in Germany supplemented by extensive data on the rich to answer this question. We identify the key predictors for belonging to the top 1 percent of income, wealth, and both distributions jointly. Although we consider many, only a few traits matter: Entrepreneurship and self-employment in conjunction with a sizable inheritance of company assets is the most important covariate combination across all rich groups. Our data suggest that all top 1 percent groups, but especially the joint top 1 percent, are predominantly populated by intergenerational entrepreneurs.

Suggested Citation

  • Johannes König & Christian Schluter & Carsten Schröder, 2023. "Routes to the Top," Discussion Papers of DIW Berlin 2066, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwwpp:dp2066
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    File URL: https://www.diw.de/documents/publikationen/73/diw_01.c.889345.de/dp2066.pdf
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    More about this item

    Keywords

    Top wealth; top income; intergenerational transfers; rich-group classification modelling; predictions;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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