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Title:Factor shares and income inequality: Empirical evidence from Germany 2002 - 2008 PDF Logo
Authors:Adler, Martin
Schmid, Kai Daniel
Issue Date:2012
Series/Report no.:SOEPpapers on Multidisciplinary Panel Data Research 460
Abstract:We examine the interplay between changes in the functional distribution of income and the distribution of market income among households. We use micro data from the German Socio-Economic Panel as well as macro data from the German Federal Statistical Office from 2002 to 2008. We categorize and evaluate the implications of changes in the functional distribution of income upon the distribution of income among individuals on the basis of a simple theoretic framework that links the degree of the concentration of income from asset flows among individuals to the (structural) relationship between individuals' levels of market income and their respective income shares from asset flows. Our empirical analysis offers two insights: First, the relative rise of income from asset flows reported by German National Accounting Statistics is also evident in the micro data taken from the German Socio-Economic Panel. Second, rising capital income shares are associated with an increasing concentration of market income.
Subjects:Factor shares
income distribution
inequality
market income
JEL:D31
D33
E6
E25
Document Type:Working Paper
Appears in Collections:Publikationen von Forscherinnen und Forschern des DIW
SOEPpapers on Multidisciplinary Panel Data Research, DIW

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