The Dynamics of Earnings in Germany: Evidence from Social Security Records

Matthias Giesecke, Timm Bönke and Holger Lüthen

VfS Annual Conference 2011 (Frankfurt, Main): The Order of the World Economy - Lessons from the Crisis from Verein für Socialpolitik / German Economic Association

Abstract: We examine patterns of earnings volatility for male employees who are subject to statutory social security contributions in West Germany over the period 1986 - 2005. For this purpose, we analyse individual records covering highly reliable earnings biographies provided by the German Social Security Administration. We decompose earnings into permanent and transitory components and estimate parameters of the underlying variance-covariance structure of the earnings components model. This provides insights into the mechanics of earnings dynamics of the German labour market. We find evidence for increasing overall volatility which is predominantly driven by the permanent earnings component and therefore indicates increasing earnings inequality.

Keywords: Earnings Inequality; Earnings Dynamics; Variance Decomposition (search for similar items in EconPapers)
JEL-codes: C23 D31 J31 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (5)

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Related works:
Working Paper: The Dynamics of Earnings in Germany: Evidence from Social Security Records (2015)
Working Paper: The dynamics of earnings in Germany: Evidence from social security records (2015)
Working Paper: The dynamics of earnings in Germany: Evidence from social security records (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc11:48692

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