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Routes to the Top

Discussion Papers 2066, 37 S.

Johannes König, Christian Schluter, Carsten Schröder

2023

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Abstract

Who makes it to the top? We use the leading, socio-economic survey in Germany supplemented by extensive data on the rich to answer this question. We identify the key predictors for belonging to the top 1 percent of income, wealth, and both distributions jointly. Although we consider many, only a few traits matter: Entrepreneurship and self-employment in conjunction with a sizable inheritance of company assets is the most important covariate combination across all rich groups. Our data suggest that all top 1 percent groups, but especially the joint top 1 percent, are predominantly populated by intergenerational entrepreneurs.

Johannes König

Research Associate in the German Socio-Economic Panel study Department

Carsten Schröder

Board of Directors SOEP and Division Head Applied Panel Analysis in the German Socio-Economic Panel study Department



JEL-Classification: D31;C38;D63
Keywords: Top wealth, top income, intergenerational transfers, rich-group classification modelling, predictions

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