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Judith Niehues IW-Trends No. 1 7. February 2017 The Middle Class in Germany: Diverse and Stable

Although the middle class is frequently at the centre of distribution analyses, there is no precise definition of this income group. Findings as to its long-term development have, moreover, varied. As defined by the Cologne Institute for Economic Research (IW), a person living alone in 2014 was considered middle class in the narrow sense of the word if he or she had a monthly net disposable income between 1,410 and 2,640 euros.

Diverse and Stable
Judith Niehues IW-Trends No. 1 7. February 2017

The Middle Class in Germany: Diverse and Stable

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German Economic Institute German Economic Institute

Although the middle class is frequently at the centre of distribution analyses, there is no precise definition of this income group. Findings as to its long-term development have, moreover, varied. As defined by the Cologne Institute for Economic Research (IW), a person living alone in 2014 was considered middle class in the narrow sense of the word if he or she had a monthly net disposable income between 1,410 and 2,640 euros.

For a family of four the income limits were 2,950 and 5,540 euros. However defined, the middle class as an income group represents by far the largest section of the population in Germany. Based on current data from the 2015 wave of the Socio-Economic Panel (SOEP) and applying the IW definition, approximately every second person is a member of the middle class, a figure which has not changed fundamentally since German reunification. Developments since 1991 can be divided into three phases. First the middle class grew slightly as a proportion of the total population as the formerly communist east of the country caught up economically. From a peak of almost 55 per cent in 1997 it then declined to around 50 per cent in 2005. Apart from the influence of a change in the sampling procedure in 2013 the country’s class structure has changed but little since then. There is certainly no evidence of the middle class continuously eroding at the edges. The present analysis reveals that the boundary between the middle and lower classes does not run along the so-called „collar line“. Skilled blue-collar workers are highly likely to belong to the narrowly-defined middle class, as are trained white-collar workers. The self-employed, civil servants at management level and white-collar workers in highly-skilled or managerial positions frequently qualify as at least upper middle class and thus belong to the richest quintile of society.

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