Reduction in Income Inequality Faltering

DIW Weekly Report 1 / 2014, S. 16-25

Markus M. Grabka, Jan Goebel

get_appDownload (PDF  232 KB)

get_appGesamtausgabe/ Whole Issue (PDF  0.59 MB)


Inequality of disposable incomes in Germany has decreased slightly since its peak in 2005. However, this trend did not continue in 2011. The most important reasons for this were the inequality in market incomes, including capital incomes, which had increased again. Besides this finding, the updated analyses of personal income distribution based on the Socio-Economic Panel Study (SOEP) show that the risk of poverty did not rise further after a long period of upward movement. Income mobility over time is equally important in terms of social policy, i.e., the upward or downward movement of individual groups of people in the income hierarchy. Here, the most recent analyses confirm the trend of significantly decreasing income mobility since German reunification. For example, the odds of exiting the risk of poverty within a period of four years has dropped by ten percentage points to 46 percent in recent years.

Markus M. Grabka

Direktorium SOEP und kommissarische Bereichsleitung Wissenstransfer in the German Socio-Economic Panel study Department

JEL-Classification: D31;I31;I32
Keywords: Income inequality, income mobility, SOEP
Frei zugängliche Version: (econstor)