Irene Becker

A Comparison of the Main Household Income Surveys for Germany: EVS and SOEP

Description and analysis of the personal income distribution in Germany rely heavily on two major surveys, the EVS (Income and Consumption Survey) and the SOEP (Socio-Economic Panel Study). These surveys, however, do not deliver exactly the same results in terms of income levels and structure, as well as on inequality and poverty. Some of the discrepancies have led to confusions in the political debate following the first official Poverty and Wealth Report in Germany.1 Thus, the purpose of this paper is to highlight the methodological differences between EVS and SOEP against the background of the recommendations of the “Canberra Group” (Expert Group on Household Income Statistics) and to give a comparison of some substantive results on the basis of both surveys. In describing and discussing systematically the features of the two major inquiries on household income, we aim to improve the understanding of differences in fmdings when measuring the German income distribution using SOEP and EVS, respectively.

The personal distribution of income in an international perspective

The book examines the development and the dynamics of the personal distribution of income in Germany, Great Britain, Sweden and the United States and some other OECD countries. Starting with the distribution of labour income, the issue is then expanded to include all monetary incomes of private households and to adjust for household size by an equivalence scale. Some authors analyse one country in detail by decomposing aggregate inequality measures, other authors focus on direct comparisons of some features of the income distribution in Germany with those in Great Britain or in the United States. The results suggest dominant influences of unemployment as well as of tax and transfer policies and different welfare regimes, respectively, but also show that our knowledge about distributional processes is still limited.

Soziale Gerechtigkeit – ein magisches Viereck

Zusammenfassung Der Beitrag bezieht sich auf das Problem der Gestaltung von Institutionen, die Soziale Gerechtigkeit gewahrleisten sollen; Es geht also um jene gesetzlichen Regelungen, die die Verteilung von Einkommen, Vermogen, Gutern, Rechten, Freiheitsspielraumen und Verwirklichungschancen innerhalb einer Gesellschaft bestimmen. Dabei wird die individuell-ethische Perspektive vollig ausgeklammert, d. h., dass Verhaltensvorschriften fur die Staatsburger, die uber die Beachtung der Gesetze hinausgehen, nicht behandelt werden. Schlagworte: Gerechtigkeit, Grundgesetz, Einkommen, Vermogen, Institutionen, Naturrecht

Zur Entwicklung von Armut und Wohlstand in der Bundesrepublik Deutschland — eine Bestandsaufnahme

Die aktuelle Debatte um Kinderarmut bzw. die „Infantilisierung der Armut“ hat das gesellschaftspolitische Interesse an Altersarmut verdrangt und teilweise durch Thesen einer „Uberversorgung“ der Senior(inn)en ersetzt. Die in diesem Zusammenhang implizit aufgeworfene Frage nach der Generationengerechtigkeit stellt einen spezifischen Aspekt des allgemeinen Problems der Verteilungsgerechtigkeit dar.2 Sie ist von daher nur im Kontext der Gesamtentwicklung von Wohlstand und seiner Verteilung in einer Gesellschaft sinnvoll zu diskutieren. Hier wird versucht, einen empirischen Beitrag zur notwendigen Bestandsaufnahme zu leisten, ohne die eine sachliche gesellschaftspolitische Auseinandersetzung nicht moglich ist. Dabei gilt unter den normativen Gesichtspunkten von Gerechtigkeit und sozialstaatlichen Aufgaben den Randbereichen der Verteilung, d.h. Armut und gehobenem Wohlstand3, besondere Aufmerksamkeit.

Changes in the Distribution of Pre-Government and Post-Government Income in Germany 1973 – 1993

During the two decades from 1973 to 1993, Germany underwent far-reaching economic and political changes. 1973 was the last year of full employment, with an unemployment rate of just 1.2%, while in 1993 unemployment in the western part of Germany had risen to 8.2%. In 1989 the Berlin wall was tom down and in mid-1990 the Federal Republic of Germany and the German Democratic Republic founded a monetary union. In Oetober 1990, with German reunifieation, the West German legal system, including the regulations for the labor market as well as the entire tax and transfer system, was implemented in East Germany3, and federalism was introduced in the former German Democratic Republic through the formation of several new Lander. West Germany paid high transfers to East Germany amounting to up to 5% of West German GDP per year4; these transfers will continue for many years to come.

Income Redistribution: Tax-Financed Versus Contribution-Financed Components

Drawing on about twenty expert contributions devoted to trends in different fields of social life up to 1998, the first Poverty and Wealth Report by a German government summarises by observing that “social exclusion has increased and distributional justice has decreased”1. In his Foreword, Labour and Social Affairs Minister Walter Riester comments that, in the light of the report’s findings, the question of fair and equitable distribution needs to be re-examined.2 Accordingly, response to the government report has been accompanied by calls for political counter-measures. Hopes have been placed in an improved environment and an expanding employment generated by economic growth and “mutually stimulating improvements on both the supply and demand side of the economy”.3 But there are also comments emphasising the necessity to influence distribution directly by tax and transfer policies.4 As a result, attention has to be centred on how the existing state redistribution system actually functions.

Inequalities Between Income and Wealth

In an international perspective, Germany can be regarded as a rich country with high levels of income and wealth. But how are incomes and wealth holdings distributed among the population? Analysing data of the Income and Consumption Survey a considerable inequality of equivalent net income distribution becomes evident which is by far exceeded by the inequality of net wealth distribution. Additionally, there exists a strong correlation between high equivalent net incomes and high net wealth per capita, but the overall correlation between income and wealth is at a medium level. Since the data base does not sufficiently represent the highest income and wealth groups the figures given characterize a lower bound of inequality. True inequality is somewhat higher.