Women’s Labour Market Attachment and the Gender Wealth Gap

Abstract

This article examines the evolution of the gender wealth gap in Germanyduring the first decade of the XXI century. This period is characterized byan increase in labour supply of women and change in occupational structure dueto numerous reforms undertaken by the government. We use the Firpo, Fortin,Lemieux detailed decomposition technique throughout the wealth distribution toidentify the main factors explaining the gap over time. Findings indicate that anincrease in the labour market participation of women and the resulting changesin the occupational structure are accompanied by positive changes in women’swealth accumulation, which reduce the gender wealth gap. The role of permanentincome decreases due to a reduction both in the gender difference in average permanentincome and in gender differences in its returns. There remain substantialdifferences in the way women and men accumulate wealth. Policy interventions tofurther reduce the gap are discussed.