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The Distribution of National Income in Germany, 1992-2019

Author

Listed:
  • Stefan Bach
  • Charlotte Bartels
  • Theresa Neef

Abstract

This paper analyzes the distribution and composition of pre-tax national income in Germany since 1992, combining personal income tax returns, household survey data, and national accounts. Inequality rose from the 1990s to the late 2000s due to falling labor incomes among the bottom 50% and rising incomes in the top 10%. This trend reversed after 2007 as labor incomes across the bottom 90% increased. The top 1% income share, dominated by business income, remained relatively stable between 1992 and 2019. A large share of Germany’s top 1% earners are non-corporate business owners in laborintensive professions. At least half of the business owners in P99-99.9 and a quarter in the top 0.1% operate firms in professional services – a pattern mirroring the United States. From 1992 to 2019, Germany’s top 0.1% income concentration exceeded France’s and matched U.S. levels until the late 2000s.

Suggested Citation

  • Stefan Bach & Charlotte Bartels & Theresa Neef, 2024. "The Distribution of National Income in Germany, 1992-2019," Discussion Papers of DIW Berlin 2102, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwwpp:dp2102
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    File URL: https://www.diw.de/documents/publikationen/73/diw_01.c.928505.de/dp2102.pdf
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    More about this item

    Keywords

    Income distribution; labor income; capital income; top Incomes;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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