The Broken Elevator: Declining Absolute Mobility of Living Standards in Germany

Timm Bönke, Astrid Harnack-Eber and Holger Lüthen

No 2068, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: This study provides the first absolute income mobility estimates for postwar Germany. Using various micro data sources, we uncover a steep decline in absolute mobility rates from 81 percent to 59 percent for children’s birth cohorts 1962 through 1988. This trend is robust across different ages, family sizes, measurement methods, copulas, and data sources. Across the parental income distribution, we find that children from middle class families experienced the largest percentage point drop in absolute income mobility (-31pp). Our counterfactual analysis shows that lower economic growth rates and higher income inequality contributed similarly to these trends.

Keywords: Absolute mobility; Intergenerational mobility; Income distributions; Consumption; Inequality (search for similar items in EconPapers)
JEL-codes: D31 H0 J62 (search for similar items in EconPapers)
Pages: 36 p.
Date: 2024
New Economics Papers: this item is included in nep-eur, nep-his and nep-lab
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