SOEP Research: Inequality and Mobility

Inequality-Minimization with a Given Public Budget

We solve the problem of a social planner who seeks to minimize inequality via transfers with a fixed public budget in a distribution of exogenously given incomes. The appropriate solution method depends on the objective function: If it is convex, as in the case of the absolute mean deviation, it can be solved by an interior-point algorithm. If it is quasiconvex, as in case of the Gini coefficient, ...

Inheritances in Europe: High Earners Reap the Most Benefits

By 2010, 27 to 40 percent of all households in euro countries had inherited or received gifts. This only includes transfers from outside their own household. The present value of these transfers averaged between 85,000 and 274,000 euros, depending on the relevant country. The sum of all inheritances and gifts in western Germany corresponds to one-third of the current net worth of households— and is ...

Value of Inheritances Varies Considerably from Country to Country: Eight Questions to Christian Westermeier

Shrinking Share of Middle-Income Group in Germany and the US

According to calculations based on the Socio-Economic Panel (SOEP) study, the proportion of middle-income group in Germany fell by more than five percentage points from 1991 to 2013, taking it to 61 percent. Germany is not the only country to have experienced such a downturn, however. Analyses of the situation in the US indicate a similar decline. To the middle-income group belong individuals in households ...

Despite the Strong Labour Market, the Share of the Middle Income Group Has Not Risen in Germany: Seven Questions to Markus M. Grabka

Cognitive Skills, Non-Cognitive Skills, and Family Background: Evidence from Sibling Correlations

This paper estimates sibling correlations in cognitive and non-cognitive skills to evaluate the importance of family background for skill formation. Based on a large representative German dataset including IQ test scores and measures of non-cognitive skills, a restricted maximum likelihood model indicates a strong relationship between family background and skill formation. Sibling correlations in non-cognitive ...

Intergenerational Transfers and Wealth in the Euro-Area: The Relevance of Inheritances and Gifts in Absolute and Relative Terms

Private wealth is a crucial factor for the economic well‐being of households. Key determinants of private wealth include intergenerational wealth transfers (gifts and inheritances), which are gaining importance since 1990, as research suggests. We conduct a detailed investigation of the distribution of wealth transfers in eight Euro‐area countries. First, we investigate the patterns of prevalence and ...

Children's Opportunities in Germany: An Application Using Multidimensional Measures

Single parents and unmarried couples are increasingly replacing the traditional nuclear family. This paper investigates if the greater variety in living arrangements contributes to increased resource disparities among children in Germany. Children in single parent families are disadvantaged in at least three dimensions decisive for their later achievements: material standard of living, parental education, ...

Are We Architects of Our Own Happiness? The Importance of Family Background for Well-Being

This paper analyzes whether individuals have equal opportunity to achieve happiness (or well-being). We estimate sibling correlations and intergenerational correlations in self-reported life satisfaction, satisfaction with household income, job satisfaction, and satisfaction with health. We find high sibling correlations for all measures of well-being. The results suggest that family background explains, ...

Development of Top Incomes in Germany since 2001

What share of total income in Germany is owned by the country’s top income earners and how has this share developed over the past decade? Answers to these questions can be found both in representative survey data such as the longitudinal Socio-Economic Panel (SOEP) study and in administrative data on income taxation. After the statistics have been harmonized accordingly, it becomes clear there remain ...