According to the calculations of economic researchers, the inequality of income distribution in Germany is increasing. In particular, high earners are likely to grow this year, while low earners will see a smaller markup.
Inequality in the distribution of income in Germany will continue to increase this year: In 2023, as in the previous year, it is likely to increase especially for high earners and to a lesser extent for low earners. This is the result of a model calculation released today by the German Institute for Economic Research (DIW).
“Overall, labor income inequality may even have increased slightly in the post-pandemic recovery, and will increase again this year,” the Berlin researchers concluded. This could exacerbate the impact of the energy crisis, regardless of However, the energy crisis mainly affects poorer households.
High earners with higher wage growth
According to the calculations of scientists, the bottom 40% of income this year should only increase by 2.55%, while the “top 10” can achieve an increase of 2.81%. The picture is already similar in 2022: Among the lowest income groups, the increase is 5.96% lower than the top income group’s 6.85%. Last year’s high inflation “resulted in lower real incomes for lower earners, while higher earners likely benefited from a small increase in real incomes”.
The so-called Gini coefficient, which measures inequality and makes it internationally comparable, also points to a resurgence in inequality. While it has dropped from 0.39 to 0.37 over the past decade, researchers now expect an increase of around 1% this year. The Gini coefficient ranges from 0 to 1: the higher the value, the greater the inequality.
results are often delayed
The DIW uses a variety of current data as the basis for estimating and forecasting labor income distribution, from the development of the gross domestic product to the proportion of people working part-time, to representative surveys of private households in Germany.
Thus, the new predictive model accounts for the current level of inequality in total monthly income of dependent employees. Relevant data used for calculations are usually available with a delay of more than two years, which is why most previous studies have focused on the past.