Income Inequality in Germany, Part 1: Is There a Trend Reversal?

An investigation by the Ifo Institute shows that the Hartz Reforms led to a reduction in inequality in the labour market by lowering unemployment. Even focusing solely on the working population shows a significant trend reversal around 2010. The changed dynamic is primarily due to wage growth in the lower level of wage distribution. Recent data on the distribution of earned income does not support the assertion that Germany is becoming increasingly unequal.