Integrated Analysis of Income and Wealth
German Economic Institute (IW)
Distribution and poverty analyses often fail to take account of asset values. Household surveys show that on average every adult in Germany has at their disposal financial or material assets worth more than 80,000 euros. Although values for this wealth correlate positively with income, some low-income households actually have appreciable assets to fall back on. Indeed, more than a sixth of low earners could close their poverty gap for at least ten years by liquidating their assets. Since average assets continue to accrue until very late in life, taking this wealth into account lowers the relative poverty risks of the older population in particular. This result remains robust regardless of the microdata sets used.
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