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Open access
Abstract
This paper estimates and analyzes the distribution and composition of pre-tax national income in Germany since reunification, combining personal income tax returns, household survey data, and national accounts. We find that pre-tax national income inequality has increased since the 1990s, though to a lesser extent than suggested by previous studies. Our results draw parallels in top income structure and concentration to the United States: Half of the top 1% earners are non-corporate business owners in labor-intensive professions contrasting with corporate top incomes in France. Also the concentration of pre-tax national income in Germany is similar to the United States and higher than in France.
JEL classification
D31
E01
H2
H5
J3
Keywords
Income distribution
Labor income
Capital income
Top Incomes
Data availability
The data that has been used is confidential.
Cited by (0)
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This article is part of a Special issue entitled: ‘Capital vs. Labor’ published in European Economic Review.
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The authors would like to thank Laurent Bach, Thomas Blanchet, Antoine Bozio, Theresa Bührle, Giacomo Corneo, Jonathan Goupille-Lebret, Markus Grabka, Stefan Hauf, Fabian Kindermann, Wojciech Kopczuk, Clément Malgouyres, Clara Martínez Toledano, Thomas Piketty, Emmanuel Saez, Gabriel Zucman, and Eric Zwick for helpful comments. We thank the federal statistical office for supporting our analysis, in particular Hannes Fauser. Furthermore, we thank conference and seminar participants at the ECINEQ 2019, NBER’s Conference on Research in Income and Wealth 2020, IARIW 2021, the World Inequality conference 2021, the workshop of the social policy committee of the Verein für Socialpolitik 2022, and the seminars of the German Council of Economic Experts, at Paris School of Economics and at the Stockholm Institute of Transition Economics. Lotte Maaßen provided excellent research support. We gratefully acknowledge financial support from the Hans-Böckler-Foundation , Düsseldorf and Deutsche Forschungsgemeinschaft (DFG) (project nr. 510216046).
© 2025 The Authors. Published by Elsevier B.V.