Understanding the Gender Wealth Gap in Germany: Asset Value vs. Asset Ownership

Abstract

This paper investigates the gender wealth gap among married and cohabiting couples in Germany, using data from the German Socio-Economic Panel (SOEP). It explores the gender wealth gap by investigating various components of wealth and ownership disparities among couples. On average, men possess 34% more wealth than women. This gap arises both from differences in extensive margin asset ownership and differences in wealth conditional on asset ownership. The gap in asset ownership, particularly in housing and business assets, contributes significantly to the overall gender wealth gap. Employing the Oaxaca-Blinder decomposition technique, I find that observable characteristics can account for only 65% of the observed gender wealth gap. When analyzing couples where both own a given type of asset, controlling for observable characteristics eliminates the wealth gap. However, for couples with ownership differences, observable characteristics explain only a modest portion of the wealth gap and ownership gap. My findings underscore the importance of considering gender gaps in asset ownership in understanding the gender wealth gap and highlight the limited explanatory power of observable characteristics in accounting for the gap.