Women in Germany Catching Up in Earnings, but Not in Total Income
Women’s and men’s earned incomes are slowly converging. The gap narrowed from 39.1 percent in 2001 to 37.5 percent in 2016, according to a recent study by the ifo Institute. “However, if additional income from rentals, self-employment, or business holdings is taken into account, the gap actually widens: it went from 39.6 to 40.6 percent over the same period,” says Andreas Peichl, Director of the ifo Center for Macroeconomics and Surveys.
The convergence of men’s and women’s incomes is especially pronounced in the low and middle income brackets. The gap has also narrowed among top earners, although at 57.1 percent it is still very large in absolute terms: in the top 0.1 percent of the highest salaries, men earn more than twice as much as women.
A look at all income types paints a somewhat different picture: in the lower and middle income brackets, the gap between men and women has narrowed considerably. By contrast, the incomes of the top 10 percent are diverging again. This is because there is a larger gap between men and women in their earnings from self employment and business holdings.
The study is based on data from the Taxpayer Panel (TPP) and on social security data from the Institute for Employment Research (IAB) for the period from 2001 to 2016. Combining the two datasets allows us to offer a picture of the German income structure ranging from workers in marginal employment at the very bottom all the way to the highest paid CEOs at the top of the distribution. The study was conducted by researchers from the ifo Institute, the IAB and the Universities of Boston, Heilbronn and Zurich.
Inequality and Income Dynamics in Germany
CESifo, Munich, 2022
CESifo Working Paper No. 9605
