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The role of rental income, real estate and rents for inequality in Germany

Charlotte Bartels () and Carsten Schroeder ()
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Carsten Schroeder: Socio-Economic Panel at DIW Berlin and Freie Universitaet Berlin

Authors registered in the RePEc Author Service: Carsten Schröder ()

No 7, Working Papers from Forum New Economy

Abstract: We quantify the contribution of rental income to pre- and post-government equivalent household income inequality and of housing wealth to net wealth inequality between 2002 and 2017 in Germany by means of a factor decomposition. Further, we differentiate by region types (urban vs. rural, large vs. small municipalities) and federal states. We find that housing wealth, housing ownership and rental income particularly increased in large municipalities and urban areas; that rental income explains an increasing share of income inequality; and that the wealth inequality contribution of primary residence has increased over time, while the contribution of other real estate has decreased. Finally, we find an increasing rent load for the second quintile and the top quintile of the income distribution.

Keywords: inequality; income; consumption; wealth (search for similar items in EconPapers)
JEL-codes: C21 D12 D31 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2020-12
New Economics Papers: this item is included in nep-ure
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