Universität zu Köln

Biewen, Martin, Ungerer, Martin and Loeffler, Max (2019). Why Did Income Inequality in Germany Not Increase Further After 2005? Ger. Econ. Rev., 20 (4). S. 471 - 505. HOBOKEN: WILEY. ISSN 1468-0475

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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.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Biewen, Martin UNSPECIFIED UNSPECIFIED UNSPECIFIED Ungerer, Martin UNSPECIFIED UNSPECIFIED UNSPECIFIED Loeffler, Max UNSPECIFIED UNSPECIFIED UNSPECIFIED
URN:	urn:nbn:de:hbz:38-129782
DOI:	10.1111/geer.12153
Journal or Publication Title:	Ger. Econ. Rev.
Volume:	20
Number:	4
Page Range:	S. 471 - 505
Date:	2019
Publisher:	WILEY
Place of Publication:	HOBOKEN
ISSN:	1468-0475
Language:	English
Faculty:	Unspecified
Divisions:	Unspecified
Subjects:	no entry
Uncontrolled Keywords:	Keywords Language Economics Multiple languages
Refereed:	Yes
URI:	http://kups.ub.uni-koeln.de/id/eprint/12978