How long do assets last during loss of income? WSI Distribution Report 2017

Anita Tiefensee

No 37e, WSI Reports from The Institute of Economic and Social Research (WSI), Hans Böckler Foundation

Abstract: A key function of assets is securing the level of consumption during loss of income. In Germany, 30 % of households can secure their current level of consumption from their assets for a few weeks or months at the most. These households have no appreciable assets at their disposal, or are even in debt. The median figure, which splits all households into two halves of equal size, is just under two years. 10 % of households can secure their current consumption for at least just under 13 years, and 5 % can even do so for more than 21 years. The securing of consumption in East Germany is markedly lower than in West Germany. Broken down into age groups, although the securing of consumption rises with age, in every age bracket at least 20 % of households could not secure their current level of consumption at all or could so for only a very short time by using up their assets. Single parents in particular are reliant on their regular income. The results show that the majority of households have only very limited private provision in the form of assets at their disposal. Generally speaking, a household's consumption can be secured on a private or state level. There should be securing of consumption on one of the two levels, otherwise major risks are not covered. There is a patent need for political action on both levels.

Date: 2017
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