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The Diverging Trends of Male and Female Bottom Earnings in Germany

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  • Coschignano, Eliana

    (RWI)

  • Jessen, Robin

    (RWI)

Abstract

Men at the bottom quintile of the German male earnings distribution had lower average earnings in 2019 than in 2001. In contrast, female earnings have increased throughout the distribution. What explains these diverging trends and how did they translate into changes in net income? Data from the Socio-Economic Panel (SOEP) reveal that the drop in bottom male earnings is mostly due to a decrease in work hours, while hours worked of females with low earnings have increased. Changes in socio-demographic characteristics explain little of the evolution of income inequality. Households and the welfare state have cushioned much of low-earning men's income drop, while disposable incomes of women have increased by less than their earnings. Finally, earnings poverty is persistent: About half of individuals in the bottom quintile are still in the bottom quintile after five years.

Suggested Citation

  • Coschignano, Eliana & Jessen, Robin, 2024. "The Diverging Trends of Male and Female Bottom Earnings in Germany," IZA Discussion Papers 17567, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp17567
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    References listed on IDEAS

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    More about this item

    Keywords

    income inequality; earnings inequality; working hours; decomposition;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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