Lifetime Earnings Inequality in Germany

Timm Bönke, Giacomo Corneo and Holger Lüthen

No 1160, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: This paper documents the magnitude, pattern, and evolution of lifetime earnings inequality in Germany. Based on a large sample of earning biographies from social security records, we show that the intra-generational distribution of lifetime earnings of male workers has a Gini coefficient around .2 for cohorts born in the late 1930s and early 1940s; this amounts to about 2/3 of the value of the Gini coefficient of annual earnings. Within cohorts, mobility in the distribution of yearly earnings is substantial at the beginning of the lifecycle, decreases after-wards and virtually vanishes after age forty. Earnings data for thirty-one cohorts reveals striking evidence of a secular rise of intra-generational inequality in lifetime earnings: West-German men born in the early 1960s are likely to experience about 80 % more lifetime inequality than their fathers. In contrast, both short-term and long-term intra-generational mobility have been rather stable. Longer unemployment spells of workers at the bottom of the distribution of younger cohorts contribute to explain 30 to 40 % of the overall increase in life-time earnings inequality.

Keywords: Lifetime Earnings; Earnings Distribution; Inequality; Mobility; Germany (search for similar items in EconPapers)
JEL-codes: D31 D33 H24 (search for similar items in EconPapers)
Pages: 44 p.
Date: 2011
New Economics Papers: this item is included in nep-cis, nep-eur, nep-hme, nep-lab and nep-ltv
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Citations: View citations in EconPapers (14)

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Related works:
Journal Article: Lifetime Earnings Inequality in Germany (2015)
Working Paper: Lifetime earnings inequality in Germany (2012)
Working Paper: Lifetime Earnings Inequality in Germany (2012)
Working Paper: Lifetime Earnings Inequality in Germany (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:diw:diwwpp:dp1160

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