Faculty of Economics and Business Administration Publications Database

Inequality Trends for Germany in the Last Two Decades: A Tale of Two Countries

Krueger, Dirk
Sommer, Mathias
Volume: 13
Number: 1
Pages: 103 - 132
Month: January
ISSN-Print: 1094-2025
Link External Source: Online Version
Year: 2010
Keywords: Inequality; German Reunification
Abstract: In this paper we first document inequalitytrends in wages, hours worked, earnings, consumption, and wealth for Germany from the last twenty years. We generally find that inequality was relatively stable in West Germany until the German reunification, and then trended upwards for wages and market incomes, especially after about 1998. Disposable income and consumption, on the other hand, display only a modest increase in inequality over the same period. These trends occurred against the backdrop of lower trend growth of earnings, incomes and consumption in the 1990s relative to the 1980s. In the second part of the paper we further analyze the differences between East and West Germans in terms of the evolution of levels and inequality of wages, income, and consumption.