Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/150870
Authors: 
Bartels, Charlotte
Bönke, Timm
Year of Publication: 
2010
Series/Report no.: 
SOEPpapers on Multidisciplinary Panel Data Research 325
Abstract: 
Deploying data from the German Socio-Economic Panel (SOEP) we analyze the variability of individual earnings and equivalent household income. Permanent and transitory variances of male income over the period 1984-2008 are estimated for Old German Laender in order to determine their importance to income dynamics. To uncover the role of the welfare state in smoothening earnings shocks we compute different income concepts reaching from gross earnings to net equivalent household income. We find evidence that the overall inequality of earnings in Germany has been rising throughout the period due to both higher permanent inequality and higher volatility. However, taking the welfare state and its institutions into account, we find that net household income has remained fairly stable.
Subjects: 
Earnings inequality
permanent income inequality
transitory income volatility
earnings dynamics
safety net
transfer payments
JEL: 
D31
D63
I38
J31
Document Type: 
Working Paper

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