Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/46409
Authors: 
Peichl, Andreas
Pestel, Nico
Schneider, Hilmar
Year of Publication: 
2010
Series/Report no.: 
CESifo working paper: Public Finance 3219
Abstract: 
Income inequality in Germany has been continuously increasing during the past 20 years. In general, this is understood as an increase in inequality of wages due to changes in bargaining power of employees. However, the role of changing household structure is widely neglected. Societal trends like a decline in birth rate and an increase in the risk of divorce affect per capita incomes, which has repercussions for the income distribution even if wages remain constant. The aim of this paper is to quantify the proportion of changing household structures in the increase in inequality. We find that the rise in inequality was indeed more due to changes of household structure and employment behavior rather than changes in wages. Moreover, a large part of this increase is compensated by the welfare state.
Subjects: 
income distribution
demography
household size
decomposition
Germany
JEL: 
D31
D63
J11
Document Type: 
Working Paper

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