Note: We thank two referees, Andrea Brandolini (Banca di Italia) Markus Grabka (DIW Berlin), and session participants at the 2007 Meeting of the American Economic Association in Chicago, the 2007 Annual Meeting of the European Economic Association in Budapest, and the 2nd meeting of the 2007 ECINEQ Society for the Study of Economic Inequality in Berlin for helpful comments on an earlier version of this paper.
FROM BOTTOM TO TOP: THE ENTIRE INCOME DISTRIBUTION IN GERMANY, 1992–2003
Article first published online: 6 MAY 2009
© 2009 The Authors. Journal compilation © International Association for Research in Income and Wealth 2009
Review of Income and Wealth
Volume 55, Issue 2, pages 303–330, June 2009
How to Cite
Bach, S., Corneo, G. and Steiner, V. (2009), FROM BOTTOM TO TOP: THE ENTIRE INCOME DISTRIBUTION IN GERMANY, 1992–2003. Review of Income and Wealth, 55: 303–330. doi: 10.1111/j.1475-4991.2009.00317.x
- Issue published online: 6 MAY 2009
- Article first published online: 6 MAY 2009
We analyze the distribution of market income in Germany in the period 1992 to 2003 on the basis of an integrated dataset that encompasses the whole spectrum of the population, from the very poor to the very rich. We find a modest increase of the Gini coefficient, a substantial drop of median income and a remarkable growth of the income share accruing to the economic elite, which we define as the richest 0.001 percent of persons in the population. While the elite mainly obtains its income from business and capital, the income share that it receives in the form of wage income has been increasing. We also show that the dramatic decline of market income in the bottom half of the distribution is very much mitigated by income transfers within private households and by governmental redistribution.