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Michael Grömling IW-Trends No. 99 12. April 2017 The Development of Macroeconomic Income Distribution in Germany

Problems of economic growth and political polarisation in a number of developed economies are increasingly being blamed on inequality in distribution. Over the past decade this has stimulated analysis of macroeconomic income distribution.

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The Development of Macroeconomic Income Distribution in Germany
Michael Grömling IW-Trends No. 99 12. April 2017

The Development of Macroeconomic Income Distribution in Germany

IW-Trends

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Problems of economic growth and political polarisation in a number of developed economies are increasingly being blamed on inequality in distribution. Over the past decade this has stimulated analysis of macroeconomic income distribution.

If there is a shift in national income creation towards capital income, this is bound to affect personal income distribution and how society perceives it. However, an international comparison of advanced countries over the last quarter-century shows no general or consistent fall in the labour share. Rather, among the 18 countries compared, no uniform pattern can be discerned. Apart from the effects of sometimes considerable fluctuation in the state of the economy, Germany had a stable labour share in the 1990s, and has had so again in recent years. When interpreting functional incomes and their distribution, attention needs to be paid to the limits and peculiarities of the underlying statistics, particularly with regard to corporate profits. The definition of employee compensation does not include the earned incomes of the self-employed, which are instead booked as corporate income. Moreover, the functional distribution of income provides a guide to the income position of private households. The sector accounts in the national account system indicate that the latter’s most recent share of Germany’s primary national income was 83 per cent.

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The Development of Macroeconomic Income Distribution in Germany
Michael Grömling IW-Trends No. 99 12. April 2017

Michael Grömling: Entwicklung der makroökonomischen Einkommensverteilung in Deutschland

IW-Trends

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Maximilian Stockhausen in Journal of Economic Inequality External Publication 17. August 2021

Like father, like son?: A comparison of absolute and relative intergenerational labour income mobility in Germany and the US

Are children better off than their parents? This highly debated question in politics and economics is investigated by analysing the trends in absolute and relative intergenerational labour income mobility for Germany and the US.

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