Rising Wage Inequality in Germany

The paper investigates the evolution of wages and wage inequality in Germany based on the SOEP. Between 1994 and 2005 wage inequality, measured by the ratio of the ninetieth to tenth percentile of the wage distribution, increased from 2.5 to 3.1 in West Germany and from 2.4 to 3.2 in East Germany. In West Germany rising wage inequality occurred mainly in the lower part of the wage distribution, whereas in East Germany wage inequality predominantly increased in the upper part of the wage distribution. In West Germany the group of workers with low tenure experienced highest increases in wage inequality.

Gernandt, Johannes und Friedhelm Pfeiffer (2007), Rising Wage Inequality in Germany, Journal of Economics and Statistics (Jahrbücher für Nationalökonomie und Statistik) 227 (4) , 358-380