The Role of Rental Income, Real Estate and Rents for Inequality in Germany

Diskussionspapiere extern

Charlotte Bartels, Carsten Schroeder

Berlin: Forum for a New Economy, 2020, 25 S.
(Forum New Economy Basic Papers ; 7)

Abstract

We quantify the contribution of rental income to pre- and post-government equivalent household income inequality and of housing wealth to net wealth inequality between 2002 and 2017 in Germany by means of a factor decomposition. Further, we differentiate by region types (urban vs. rural, large vs. small municipalities) and federal states. We find that housing wealth, housing ownership and rental income particularly increased in large municipalities and urban areas; that rental income explains an increasing share of income inequality; and that the wealth inequality contribution of primary residence has increased over time, while the contribution of other real estate has decreased. Finally, we find an increasing rent load for the second quintile and the top quintile of the income distribution.

Charlotte Bartels

Research Associate in the German Socio-Economic Panel study Department

Carsten Schröder

Vize-Direktor SOEP und Bereichsleitung Angewandte Panelanalysen in the German Socio-Economic Panel study Department

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