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Why Did Income Inequality in Germany Not Increase Further After 2005?
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Martin Biewen
Published/Copyright:
December 7, 2019
Abstract
While income inequality in Germany considerably increased in the years before 2005, this trend stopped after 2005. We address the question of what factors were responsible for the break in the inequality trend after 2005. Our analysis suggests that income inequality in Germany did not continue to rise after 2005 for the following reasons. First, we observe that the general rise in wage inequality that explained a lot of the inequality increase before 2005, became less steep (but did not stop) after 2005. Second, despite further increases in wage inequality after 2005, inequality in annual labour incomes did not increase further after 2005 because increased within-year employment opportunities compensated otherwise rising inequality in annual labour incomes. Third, income inequality did not fall in a more marked way after 2005 because also the middle and the upper part of the distribution benefited from the employment boom after 2006. Finally, we provide evidence that the effect of a wide range of other factors that are often suspected to have influenced the distribution such as capital incomes, household structures, population ageing, changes in the tax and transfer system and the financial crisis of 2008 did not significantly alter the distribution after 2005.
Keywords: Income inequality; poverty
Published Online: 2019-12-07
Published in Print: 2019-12-01
© 2019 by Walter de Gruyter Berlin/Boston
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- Issue Information
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Articles in the same Issue
- Public Preferences for Government Spending Priorities: Survey Evidence from Germany
- Structural Changes in the Labor Market and the Rise of Early Retirement in France and Germany
- Tax Composition and Growth: A Broad Cross-country Perspective
- Sharing the Burden? Empirical Evidence on Corporate Tax Incidence
- Wage Performance of Immigrants in Germany
- New Evidence on the Effects of the Shortened School Duration in the German States: An Evaluation of Post-secondary Education Decisions
- Should Forecasters Use Real-Time Data to Evaluate Leading Indicator Models for GDP Prediction? German Evidence
- Worker Personality: Another Skill Bias beyond Education in the Digital Age
- Changes in Occupational Tasks and Their Association with Individual Wages and Occupational Mobility
- Is There a Glass Ceiling over Germany?
- Thoughts on a Fiscal Union in EMU
- Analyzing the Efficiency of County Road Production – Evidence from Eastern German Counties
- Interregional Migration of Human Capital and Unemployment Dynamics: Evidence from Italian Provinces
- Predatory Short Sales and Bailouts
- Coaching, Counseling, Case-Working: Do They Help the Older Unemployed Out of Benefit Receipt and Back Into the Labor Market?
- The Productivity Effects of Worker Mobility Between Heterogeneous Firms
- A Synthetic Control Assessment of the Green Paradox: The Role of Climate Action Plans
- Where Does the Good Shepherd Go? Civic Virtue and Sorting into Public Sector Employment
- Cyber Technology and the Arms Race
- Elementary Index Bias: Evidence for the Euro Area from a Large Scanner Dataset
- Conservative Politicians and Voting on Same-sex Marriage
- A Novel Housing Price Misalignment Indicator for Germany
- Epstein–Zin Utility, Asset Prices, and the Business Cycle Revisited
- Management Practices and Productivity in Germany
- Take Your Time to Grow: A Field Experiment on the Hiring of Youths
- Codetermination, Price Competition and the Network Industry
- Let the Data Speak? On the Importance of Theory-Based Instrumental Variable Estimations
- The Inherited Inequality: How Demographic Aging and Pension Reforms can Change the Intergenerational Transmission of Wealth
- Competing for Good Immigrants
- Regional Impact of the German Rent Brake
- Optimal Social Insurance and Health Inequality
- Goal Setting, Information, and Goal Revision: A Field Experiment
- State-Dependent Forward Guidance and the Problem of Inconsistent Announcements
- Capital adjustment cost and inconsistency in income-based dynamic panel models with fixed effects
- In Search of an Appropriate Lower Bound. The Zero Lower Bound vs. the Positive Lower Bound under Discretion and Commitment
- The Impact of Direct Cash Payments on Whole Blood Supply
- Issue Information
- Output Growth Decomposition in the Presence of Input Quality Effects: A Stochastic Frontier Approach
- Accounting for Sustainable Development over the Long-Run: Lessons from Germany
- Changes in US Monetary Policy and Its Transmission over the Last Century
- Why Did Income Inequality in Germany Not Increase Further After 2005?
- Acknowledgements
- Index
